Protection perspective: ways to help safeguard your financial future

The financial and economic impacts of the coronavirus crisis have thrown up a host of issues for individuals and families to consider. 

There has been a sharp rise in enquiries about wills and long-term care in recent weeks, and the pandemic's effect on jobs and incomes has underlined the value of having a robust financial safety net in place. 

Tony Müdd, Divisional Director for Tax & Technical Support at St. James's Place, answers some of the questions being asked about the need for protection and future-proofing. 

Q. What steps can households and individuals take now to protect their wealth?

A. If you're in employment and still being paid, look at how long that is likely to continue. As far as you are able, try to budget appropriately. Also look longer term at other sources of finance that you would be able to access if needed (such as existing investments or, perhaps, borrowing), as well as the gaps that insurance policies could help fill. 

Q. What can people do over the longer term to create their own insurance buffer?

A. Do a risk audit on yourself. Ask what the financial implications would be - for you and your family - if you get sick or die. Ascertain what potential risks you might face as a family and as an individual. It will be different for everyone, so it's about considering your personal circumstances and those of people who rely on you to work out what you need. There's nothing to stop parents or grandparents from paying income protection premiums for a younger member of the family, particularly if they are renting or starting out on the property ladder and can't afford them. 

Q. How does this crisis highlight the importance of being prepared for later-life care?

A. A will is something that should be reviewed on a regular basis, as it sets out not only who your assets will go to, but also when. Power of attorney (POA) can be especially important, and it's essential in long-term care. Most of the long-term care work we do is with children who have the POA for the people going into care. This is an area where financial advice is enormously valuable. Long-term care planning is difficult, and people too often ask for advice when they are already in or approaching a crisis, when it's likely too late to make a big difference. 

Q. How can people make sure they don't leave any gaps in their inheritance and legacy plans? 

A. One of the many benefits of working with me is the ability to bring a family together to ensure that all the necessary issues are discussed among the people who need to be involved. They are very well placed to do it. But many families remain reluctant to talk about money issues with their families. It would be helpful if families allowed Partners to facilitate those discussions. 

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances. 

Will writing and Powers of Attorney involve the referral to a service that is separate and distinct to those offered by St. James's Place and are not regulated by the Financial Conduct Authority.