4 unexpected life events that can have long-lasting effects on your wealth

By HarperLees

As the famous line from Forrest Gump states: “Life is like a box of chocolates, you never know what you’re gonna get”.

While many of life’s twists and turns will take you to fun and exciting places, some of the unexpected events that occur could be more challenging to cope with, especially when it comes to your finances. Redundancy, separation, and bereavement can all have long-lasting impacts on your wealth that require careful management if you’re to achieve your long-term goals.

At times like this, coping with the emotional upheaval while also managing your money sensibly can be overwhelming. That’s why it can help to consult your financial planner for guidance and advice.

Read on to learn more about four unexpected life events when you may need to make some big decisions about your money, and how your financial planner could help to support you through this.

1. Receiving an inheritance

When a friend or family member passes away and leaves you an inheritance in their will, you might experience a range of emotions. As well as managing grief, you may also need to decide how to save, invest, or spend the money you have been left.

Depending on how much money you have received, an inheritance can provide a helpful boost in achieving your financial goals. Perhaps it could enable you to go travelling, pursue a new hobby, or even retire sooner than anticipated.

But with so many emotions at play, it might be confusing to know where to start. Your financial planner can help you to approach the question objectively when you are ready, helping you to use your inheritance in the most suitable way for you.

2. Separating from your partner

A separation or divorce can be one of life’s most stressful events. As well as the emotional toll, there are a range of financial decisions you need to make with your ex-partner that can affect your long-term financial wellbeing.

The effects of a divorce can have a more substantial effect on women than men. Indeed, research from Legal & General shows that women’s household income falls by an average of 41% following a separation, compared to 21% for men. One of the reasons for this is that women are more likely to waive their right to pension sharing, which can mean that they feel the financial effects of their divorce for the rest of their lives.

Your financial planner can help you to understand the financial implications of your separation and make sensible money decisions during and after this process. We regularly work alongside legal advisers to assist clients in better understanding how “tomorrow” might look. You can learn more about this on our website.

3. Being made redundant

Redundancy is something that many will experience during the course of their career. Though it can be a worrying time, it could also provide an opportunity to take a new path.

Receiving a lump sum redundancy payout can help you to cover your essential expenses while you search for your next role. Or, it might provide the financial backing to start your own business or save more towards retirement. The decision of how to use your redundancy package most effectively may be overwhelming though, which is where your financial planner can provide invaluable help and guidance.

They can help you to decide how to use your redundancy payout to bring you closer to achieving your goals. What’s more, they can help you to mitigate any tax implications so that you can use more of the money to help you fulfil your ambitions.

4. Suffering an injury or illness

Sadly, anyone can become injured or fall ill at any time, so it’s prudent to have financial protection in place to support your family if this were to happen and you were unable to work.

If you do find yourself in this position, your planner can help you to mitigate the financial implications of your illness or injury. From ensuring you are able to cover your mortgage and other regular expenses, to covering the cost of private healthcare or adapting your home to be more accessible, there are lots of potential costs to consider.

This could become overwhelming if you’re tackling it by yourself at the same time as recovering. By working with a financial planner who is familiar with your circumstances, priorities, and goals, you can focus on feeling better while they help you with the financial side of things.

For example, they could help you to claim on any insurance policies you hold or decide which savings or investments to use to cover your costs in the short term.

Get in touch

If you’d like to learn more about how we can support you with your finances through life’s ups and downs, please get in touch.

You can email us at info@harperlees.co.uk or call 01277 350560. We’ll be very happy to help.

Please note

This article is for information only. 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.

The Financial Conduct Authority does not regulate estate planning or tax planning.

Note that life insurance 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.