One in five Britons admitted that they are planning to ‘work until they drop’ in order to have a comfortable retirement, a study from Aviva has revealed. Worries about being able to afford their ‘ideal retirement’ means millions of over-40s are expecting to carry on working until they physically can’t continue.
1 Always have some money that you can access easily and quickly for emergencies, before looking to invest for the longer term. It’s reassuring to know you’ve got money set aside to cover your rent, mortgage, food and utilities for a number of months.
Passing your estate to the right people at the right time
Putting your savings, investments, life policies or assets into a trust can play an important part in estate planning. A trust is a legal entity that has control over assets for the benefit of one or more people, and there are different types of trust which can be set up according to what you intend to achieve.
In order to protect family and loved ones, it is essential to have provisions in place after you’re gone. The easiest way to prevent unnecessary tax payments such as inheritance tax is to organise your tax affairs by obtaining professional advice and having a valid Will in place to ensure that your legacy does not involve just leaving a large inheritance tax bill for your loved ones.
Providing the legal authority to act on your behalf
A Power of Attorney is a legal document that allows you to give someone else the legal authority to act on your behalf. There are several different types of Power of Attorney. A Lasting Power of Attorney (LPA) (previously called an ‘Enduring Power of Attorney’) allows your attorneys to make decisions for you when you no longer wish to, or when you lack the mental capacity to do so.
An essential part of financial planning that provides peace of mind about what happens to your wealth
Your Will lets you decide what happens to your money, property and possessions after your death. If you make a Will you can also make sure you don’t pay more inheritance tax than you need to. It’s an essential part of your financial planning. Not only does it set out your wishes, but if you die without a Will, your estate will generally be divided according to the rules of intestacy, which may not reflect your wishes. Without one, the State directs who inherits, so your loved ones, relatives, friends and favourite charities may get nothing.
Continuing to cope financially due to an illness or accidental injury that prevents you from working
No-one can guarantee that they will not be the victim of an unfortunate accident or be diagnosed with a serious illness. The bills won’t stop arriving or the mortgage payments from being deducted from your bank account, so going without income protection insurance could be tempting fate.
Most people don’t like to contemplate what would happen if they were diagnosed with a critical illness, but not considering the future could mean that, should you survive such a catastrophic event, you may not have the financial cushion you need for everyday life.
Guaranteed financial protection that lasts for the rest of your life
As the name suggests, whole-of-life policies are ongoing policies that pay out when you die, whenever that is. Because it’s guaranteed that you’ll die at some point (and therefore that the policy will have to pay out), these policies are more expensive than term assurance policies, which only pay out if you die within a certain timeframe.