Thinking of the future

Patients, appointments, delivering care, running a busy department, business or practice. The list of things to do as a medical professional probably seems never ending and it’s all too easy to spend your time dealing with the here and now. But when was the last time you gave serious thought to yours and your family’s own personal future?
   
One particular area which medical professionals often neglect is their personal financial planning. For instance, have you recently considered what your answer would be to important question, such as when to retire and what effect death or serious illness would have on life plans.
   
Whilst only a couple of the questions above may be relevant in your circumstances, hopefully they will kickstart you into thinking about your and your family’s own finances and the questions that really matter to you. Obviously, once you know the questions, you will want the answers. Below, are some key areas of personal financial planning and top tips to help make sure you remain in control of your finances, rather than letting them control you.

Deadline to the breadline
Research in 2014 from Legal & General shows that on average, people in the UK could be on the breadline in just 29 days if anything happened to them or their partner. And don’t rely on state benefits for help. Improve your financial security by considering life assurance and/or income protection.

Get a clear picture of your household finances by sitting down and putting together a budget showing your monthly income and expenditure. Once finished, you will know where you stand each month and what you can and can’t afford. Unbiased.co.uk provide some great tools and calculators to help you budget and Certified Financial PlannerCM professionals, the top echelon of financial planners, can help you draw up a financial plan to help you achieve the financial future you want.

Payback time
Debts, including credit card debt, is a big hurdle when trying to get financially fit. Research from The Money Advice Service reveals that one in three of us started 2015 with Christmas-related debts. It’s all too easy to let debt mount up and spiral out of control. Pay off the balance monthly to avoid significantly increasing the amount you owe. Try to ensure that you live within your means each month, and don’t take on unnecessary debts.

Bootcamp your cash
It pays to shop around and get the best deal on your savings possible. There’s generally little loyalty shown by banks to customers, so constantly moving to the most competitive deal on the market is worthwhile.
   
We are now living longer than ever before. Estimates of life expectancy suggest that most individuals born today will live beyond 90 years of age. However, before you start dreaming of your retirement, it’s worth considering how this is going to be paid for. Such expectations for our older age means saving for the future, especially retirement, is now more important than ever before – and the earlier you start retirement planning, the easier it is to accumulate sufficient funds. Remember that the current State Pension is just £102.15 a week. Could you live on just that for the next 25 years?

NISA Changes
NISAs recently underwent a makeover and have become an increasingly tax efficient way of saving for the future. Money held in a NISA continues to be free of income tax and capital gains tax but now the maximum investment amount has gone up to £15,000 and surviving spouses can now to enjoy tax free investment returns on savings equal to the deceased’s ISA fund.

The Government has recently increased the maximum amount you may contribute to Junior ISAs. As with full ISAs, Junior ISAs can invest in cash or stocks and shares free of income tax. A parent or grandparent can make contributions, up to £4,000 per year, and at age 18, your child will be able to gain access to the cash pot built up and use the money to fund university fees or a house deposit. 

Pensions
If you’re a member of the NHS Pension scheme, you’ll appreciate that it is a major benefit of your role. However there are a number of changes to the scheme that you should be aware of and which may have implications on your pension funding. Make sure you understand what the changes are and how they will affect you.
   
Additionally, from 6 April 2015, a raft of new pensions legislation comes into force giving more freedom to pension savers than ever before. According to Treasury figures around 320,000 people with defined contribution (i.e. private) pension schemes will be immediately ‘set free’ by the new reforms. This has changed the landscape in terms of planning for retirement. While this is all excellent news for pension savers, the new rules wont apply for anyone in a defined benefit scheme such as the NHS Pension scheme and you will only benefit from the new rules if you transferred to a defined contribution pension scheme before 6 April 2015. Take professional advice from a Certified Financial Planner professional or contact an Accredited Financial Planning Firm. Both have been independently assessed by the Institute of Financial Planning.

House prices
As house prices balloon it’s all too easy to overvalue your property when thinking about your financial future. Too many people have an over-inflated view that they will enjoy a comfortable future just with the value of their home. However, if property prices cool or you can’t sell when you want to, you may be in trouble.

Consider diversifying your savings across a number of different types of savings vehicles to avoid putting all eggs in one basket.

It’s estimated up to £15 billion pounds of unclaimed financial assets in the UK lie in old bank accounts, pensions, life assurance and investments. And there’s more – most of us have savings or a workplace pension which may be under exploited or forgotten about altogether.

Over the years, the worry of being under‑protected and over exposed to financial catastrophe has also caused some people to acquire too many policies. Have a clean out, bin the surplus and see what you unearth.

Mark Brownridge is a member of the Institute of Financial Planning and research and development manager at Mazars Financial Planning.

Further information
www.financialplanning.org.uk 

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