6 key life events a financial planner can help you prepare for

Navigating life’s pivotal moments can bring a mix of both excitement and apprehension. While some situations might be joyous, such as a marriage or the birth of a child, others can be challenging to navigate, such as divorce or separation.

Moreover, while these life events can enrich our journey, they might also come with substantial financial implications. From helping a loved one take their first step onto the property ladder to embracing retirement, understanding and preparing for these milestones is crucial.

I want to talk about the key life events where the expertise of a financial planner could be invaluable and highlight how proactive planning can help improve your future financial wellbeing.

Here are six important life events where the support of a financial planner could make a significant difference.

1. Helping a loved one buy their first home

For many, owning a home is a cornerstone of financial security. Whether it’s your first time helping a family member onto the property ladder or you have done so before, it’s important to remember that offering financial support can have an effect later down the line when it comes to your retirement affordability, investment potential, Inheritance Tax (IHT), and more.

Though there are multiple ways to do this, one of the most common is offering a gifted deposit. I can help you understand how this could affect your estate and tax liability, and if it’s not suitable, explore alternatives.

2. Welcoming new additions to the family

The arrival of children or grandchildren can bring immense joy, but there may also be significant financial responsibilities that evolve as they grow.

The initial costs of having a child can be significant and include:

• Childcare expenses
• A drop in income due to parental leave
• Setting up a household for a new arrival.

If you’re welcoming a grandchild, you may want to financially support your children as they adapt to this new life change. Keep in mind that this could require long-term planning, particularly if you want to contribute to a savings account for future education or homebuying costs, or plan on gifting money out of your surplus income.

Both could affect your estate, so understanding the IHT implications is key.

Read more: Understanding Inheritance Tax: Thresholds, rates, and who pays it

I can also help ensure that you’re protected should the worst happen, meaning your family’s financial future is safe. This could include financial protection or simply updating your will to reflect these familial changes.

3. Going through a career change or redundancy

A career shift, whether by choice or circumstance, can have significant financial repercussions.

• A planned career change: If you’re moving to a lower-paying but more fulfilling role, starting a business, or going freelance, I can help you assess the potential financial impact. This might mean helping you to create a new budget, advising on pension transfers, or setting up self-employed pension arrangements.
• An unplanned career change: In the event of a redundancy, I can help you understand your redundancy package, explore options for your pension, and guide you on managing your finances during a period of unemployment.

I can also help you understand and bolster your financial situation before any career changes appear on the horizon. This could include anything from helping to ensure you have adequate financial protection in place to helping you build a robust emergency fund.

4. Managing a divorce or separation

The emotional side of a divorce or separation can be incredibly challenging, and the financial implications might only add to that.

I can work with you and your legal team to understand how assets are divided, helping ensure the division is fair and efficient.

I can also help you evaluate the long-term financial effects of different settlement options.

Once the dust has settled, we can review your new budget together, assess your new insurance needs, and establish new financial goals to help support your financial independence.

5. Receiving a financial windfall

Whether through an inheritance or other means, receiving a large sum of money can be a welcome boost. It can also be complicated and introduce several tax implications.

I can help you integrate this windfall into your financial plan, whether it’s for paying down debt, investing for growth, funding a large purchase, or boosting your retirement savings.

Together, we can also look to ensure that your tax liability is as minimal as possible, particularly if this money becomes part of your estate for IHT purposes.

6. Approaching or entering retirement

Retiring is perhaps one of the most significant financial transitions you’ll experience, and it requires careful planning.

As you’re preparing to retire, I’ll help you understand your State Pension entitlement and help you review your pension pots. Moreover, we’ll go over your income strategy and make sure we’ve explored all options, such as annuities, drawdown, or a blend of both.

Ultimately, I’m here to help ensure that your money lasts throughout your retirement, including factoring in other long-term considerations, such as care costs, IHT planning, and making sure your estate is in order.

Proactive planning can help you secure a stable future

Life’s journey is unpredictable, but managing the ins and outs of your finances doesn’t have to be.

Together we can plan for life’s key events and help ensure that, no matter what comes your way, you’re financially prepared and ready to face anything.

Don’t wait for the big moments to get going, start the conversation today and let’s discuss how you can prepare.

Email Marnel.Stafford@fosterdenovo.com or call 07305 970959 or 0207 469 2800 to find out more about how I can help you.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

The Financial Conduct Authority does not regulate estate planning, taxation advice, school fees planning or tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. Pension savings are at risk of being eroded by inflation.

Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means tested benefits.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Your pension income could also be affected by the interest rates at the time you take your benefits.

When investing your capital may be at risk.

Note that life insurance and financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.