Putting a financial plan in place isn’t simply about accumulating as much wealth as possible. It’s about creating a strategy to help you meet your long-term life goals, at the same time as enjoying your life in the here and now.
What’s more, creating your plan is just the first step. Regular reviews are just as important to make sure your plan reflects any changing life circumstances and, most importantly, still works for you and your family.
Your financial plan is best viewed as an evolving work in progress
As your life changes, so will your financial plan. So, far from being a tick-box exercise, your plan is something which adapts to meet your needs throughout your life.
Changing circumstances can mean certain aspects of your original plan may no longer be appropriate, and we can work with you to assess any necessary updates.
This can be particularly pertinent if you are:
- Relocating abroad or returning to the UK
- Changing jobs or becoming self-employed
- Getting married, divorced, or remarried
- Recently bereaved
- Buying a property
- Inheriting wealth
- Planning to retire.
Reviewing your financial plan at least once a year can help to mitigate the potential impact of these changes. Here are five ways a review can help your wealth work as hard as possible for you.
1. Keeping your beneficiaries up to date
If you have a will, then it could be easy to assume that your pensions will automatically pass on to your beneficiaries.
However, you need to make a separate nomination for who you’d like your pension beneficiaries to be, using an “expression of wish and nomination” form. This tells your pension provider who you’d like any unused pension to go to.
If you don’t keep these up to date, your previous nominations can remain in place after divorce, marriage, or remarriage, and your ex-spouse could end up inheriting. Or, if you don’t name anybody at all, it’s up to your pension provider to nominate someone after your death. So, it’s essential to keep these nominations up to date, especially after life events such as these.
2. Making sure your protection policies are still right for your needs
When we review your financial plan with you, we can also make sure that all your protection is still fit for purpose.
For example, if you’ve paid off your mortgage, then you won’t need mortgage protection anymore. Or if you’re moving or have moved overseas, then you’ll need to make sure your cover is still valid in your new location.
You might also decide that you want to take out different protection to reflect any life changes, such as income protection or key person insurance, if you’ve become self-employed or started a business.
3. Checking that your investments still reflect your time frame and risk tolerance
Your investment portfolio will be created in line with your attitude and tolerance to risk at the time. But this can change during your life.
As you become older, you might find you’re less inclined to chase growth at any cost and would rather place your focus on a steady balance.
Meanwhile, market changes could mean that the balance of risk in your portfolio has tipped in a different direction than you originally intended.
We can talk to you about your current ideal portfolio and make any tweaks or bigger changes to keep it aligned with your own position.
4. Keeping up with your pensions
Job and career changes can mean you might have acquired multiple pensions over the course of your working life. Even with a regular review, if you’ve changed jobs in the meantime, then you could have added another pension pot since the last time we spoke.
Having lots of pensions can make it harder to keep track of where you are with your retirement savings, and in some cases, it could prove easier to manage if you consolidate your pensions into a single pot.
This is something we can explore with you to see if it could be the right option. Even if it’s not, having a regular check-in on your pensions means you’re less likely to forget what you have.
5. Factoring in changes to legislation
The rules around tax and pensions can also change over time, and if you don’t factor these into your financial strategy, you could end up with a larger-than-necessary tax bill.
For example, from April 2027, most unused pension funds will be factored into your estate for Inheritance Tax (IHT) purposes. Previously, you may have chosen to preserve your pension wealth to pass on to your loved ones and drawn income from other sources.
However, in light of the new legislation, it could be more tax-efficient to use your pension first and preserve your wealth in your ISAs or place it into a trust.
Get in touch
An annual review is part of our regular process, so we can make sure your financial plan is up to date. But we’re always here to help, so please get in touch if there’s anything you’d like to talk to us about in between reviews.
Please email enquiries@gag-ltd.com or call 0131 363 0090.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
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.
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.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
The Financial Conduct Authority does not regulate estate planning, tax planning, trusts, or will writing.