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Financial planning during the lockdown period

Financial planning during the lockdown period
May 5, 2020 Amy Cooper
Financial planning

With the UK lockdown not due to end any time soon, this prolonged period of downtime could be a good opportunity to get some of your fundamental financial planning in order. In this article, George Square Financial Management shares a handy checklist of elements to look into while spending more time at home over the coming weeks.

1. Budgeting

An important part of financial planning is budgeting. You could use this extra time to review your monthly or weekly outgoings and ensure you are making the most of your money. This is especially important if you are facing a cut in pay or income as a result of the pandemic.

It may be that, since lockdown measures came into place, there are certain monthly expenses you’ve found you can manage without. This could be anything from getting lunch out every day or buying a mid-morning coffee, to an expensive gym membership. Making a comparison of your outgoings before and after lockdown measures came into force may be a useful way of seeing where you can make some extra savings.

2. Write or update your will

According to research carried out by The Royal London Mutual Insurance Society, 54% of adults in the UK do not have a will, and 5.4 million adults without a will would not know where to begin if they were to write one.

Making a will provides you with the peace of mind of knowing exactly how your money, property and possessions will be dealt with after your death. It is also the first step to take to structure your affairs in order to minimise your Inheritance Tax liability.

For those who already have a will, now could also be a good time to review it and determine if it needs to be updated.

3. Update your Expression of Wishes

In most pensions, the scheme administrator has the final say over who receives your pension after you pass away. This is part of the structure which allows your pension to stay outside of your estate for inheritance tax purposes.

However, the scheme administrator will still want to distribute your pension the way you would have wanted. An expression of wishes is your way of articulating who you would like your beneficiaries to be.

You can update your expression of wishes as often as you like, and there’s no limit to the number of beneficiaries you can name for your pension. In fact, it’s very important that you keep your expression of wishes up to date as and when your circumstances change. You should contact your pension providers to find out your current nomination and to obtain the relevant forms as soon as possible.

4. Trace any lost pensions

This period of down time could also be a good opportunity to get your pensions in order. It’s not always easy to keep track of a pension, especially if you’ve been in more than one scheme, or have changed employer throughout your career. But any pension funds you have accumulated in your working life could make a real difference to your overall savings when you reach retirement.

The sooner you trace a lost pension, the better. If you have any concerns over finding your misplaced pension, contact our team today and we’ll be happy to help. You could also get in touch with the Pension Tracing Service, which can help you find the details you need to trace any pensions you may have lost or misplaced.

5. Review old insurance policies

Now could be a good time to review your protection policies and check you are adequately covered in the event that you need to make a claim.

As you review your policies, you should also check if your life assurance policies are held in trust. Ensuring they are written under trust will mean that, when the funds are paid out, they do not automatically form part of your estate on your death.

If you do not have any insurance currently in place, then this is something that you may wish to consider. Putting in place a basic level of protection is generally more affordable than you think; certain life assurance costs just a few pounds a month. At George Square Financial Management, we can help you put in place a safety net to help ensure that you, your family, or your business are financially protected for times where life is unpredictable. Find out more here.

6. Set up an In Case of Emergency (ICE) document

Many people have a great handle on their finances, but their record keeping systems might not be obvious to family members or friends who might need immediate access to them in times of emergency.

Now would be a good time to put all your important information into one document, including the location of your Will, and anything else you think would be relevant if something were to happen to you. This could include documents like your birth and marriage certificates, your pension plan documents, insurance policies, mortgage documents and contact details for your financial adviser, accountant or solicitor.

Age UK offers a handy LifeBook resource; a free booklet where you can write important and useful information about your life, from who insures your car to where you put the TV licence.

Providing expert advice

Like anything in life, getting the right advice means talking to the right people – people you can trust and rely on to act in your interests at all times. Our financial planning experience at George Square Financial Management has been built over years of practice, helping people to address today’s needs and aspirations and prepare for what tomorrow might bring.

For financial planning advice, please get in touch with our highly qualified financial advisers.