Posted on May 22nd, 2020 | Categories - News
As the UK lockdown continues, albeit, in a newly relaxed form, you might find that you’re running out of little jobs to do around the house. If the shelves in the spare room are up, you’re out of garden fence to paint and the car is waxed and polished, why not turn to your finances?
Spring is here so with the housework up to date, why not consider giving your financial plans a spring clean?
Here are some financial housekeeping jobs to put on your lockdown to-do list:
1. Find lost pensions
The Association of Business Insurers confirmed in 2018 that the value of ‘lost’ pensions in the UK could total nearly £20 billion, citing ‘more frequent job changes and home moves’ as the biggest factor in causing people to lose track of their pension pots.
You might know who your pensions are held with, how much they’re worth, and what funds you’re invested in.
If you have multiple plans and have started to lose track, however, now is a great time to get them in order. Request up-to-date valuations from your pension providers and be sure to check what funds you’re invested in.
If you think you’ve got a ‘lost’ pension out there somewhere, use the government’s Pension Tracing Service to help you locate it.
2. Update your pension beneficiaries
Pension legislation changed in 2015 to allow pension wealth to be left to the next generation in certain circumstances. But where your unused pension fund ends up isn’t determined by your will.
Pensions won’t normally form part of your estate for Inheritance Tax (IHT) purposes and are therefore not covered in your will. Instead, your funds are distributed according to your pension beneficiaries, held by your pension scheme and updated via an Expression of Wish form.
If you don’t recall completing one in the past, or you think your personal circumstances might’ve changed since you last filled one out, speak to your scheme provider and be sure your beneficiary information is up to date.
3. Review your insurance policies
If you have insurance policies collecting monthly direct debits that you’ve long since forgotten about, now is a great time to get the paperwork out and check what you’re covered for.
Life insurance, critical illness cover, income protection – you might have different forms of cover but are they right for you? Are they aligned to your stage in life, your current financial position, and your financial goals for the future?
Whether you find you’re sufficiently covered or not, remember that insurance policies need to be updated following certain big life events. Now might be a great time to let your providers know if you have retired, moved to a new house, or changed your marital status.
We can help you sort through the policies you have, checking which ones match your financial plan, and decide whether you need more protection.
You might also want to consider putting your policies into trust and we can help with that too. Insurance policies written in trust will usually fall outside of your estate for Inheritance Tax (IHT) purposes.
4. Write a will
Another of those financial housekeeping jobs that can be easily forgotten, now is a great time to either write or review your will.
Having a will in place gives you control over what happens to your estate when you die. Conversely, dying without a will leaves your wealth subject to the rules of intestacy, meaning you and your loved ones have no say over what will happen to your estate.
And yet over half of UK adults don’t have a will in place.
If you want to leave an inheritance to your loved ones, writing – or revisiting – your will should be a priority. Remember that important life events might mean you need to review your will so check that it is up to date and in line with your wishes.
Speak to us if you are unsure about any aspect of putting a will in place.
5. Put a Power of Attorney in place
A Lasting Power of Attorney (LPA) allows you to choose who will manage your affairs if you’re no longer able. If you are incapacitated through accident or illness, a person you trust will be placed in charge of your finances and welfare.
A Health and Welfare LPA will cover daily routines, medical treatment, and moving into care. A Property and Financial Affairs LPA covers your finances, the paying of bills, and collection of benefits, for example.
Having an LPA in place puts you in control of your money and can give you peace of mind that you and your loved ones will be looked after should the unexpected happen.
If you’d like to discuss your retirement plans and need any help completing any financial housekeeping jobs, get in touch. Please email email@example.com or call 0115 933 8433.
The Financial Conduct Authority does not regulate Will Writing or Power of Attorney arrangements.