• Date

    10 Nov 2023
  • Category

    Estate and Protection Planning

Efficiently managing your finances and protecting your wealth

As interest rates are at high levels and inflation remains stubborn, it’s important to check that you’re protecting your wealth and effectively planning a safety net should the unexpected happen. A critical part of this is to review any existing or possible insurance policies so that there’s peace of mind in relation to ongoing bills and other expenses.


What to consider with your insurance

Your personal circumstances and needs will have almost certainly changed over time, so any policies need to be updated to reflect these changes. As examples, perhaps you have children who are now financially independent or you have been in a position to pay off your mortgage. 

An additional consideration is whether you are entitled to benefits with your current employer that overlap with existing policies you already have. As such, you may no longer require the ones you set up personally. Crucially, any insurance plans put in place must cover everything that's important to you. 

How the plans are set up is significant. For example: 

  • Are they written under a Trust?
  • Who are the beneficiaries?
  • Are they tax efficient?

It could be time to review these policies, how they are written, and the level of cover they provide, to make sure they are still suitable.

The following insurances help to protect against financial difficulty and provide comfort to you and your family:

  • Term Assurance – cost effective, fixed-term life assurance which can be used to pay off a mortgage in the event of death. ‘Term assurance’ policies provide life cover for a fixed period of time – 10 or 20 years, for example.
  • Critical Illness Cover – pays a cash lump sum if you are diagnosed with any of the illnesses your policy covers (this insurance usually forms part of a wider insurance portfolio). It’s designed to help support you and your family financially while you deal with your diagnosis, so you can focus on your recovery without worrying about how the bills will be paid.
  • Income Protection – replaces lost income in the event you are off work through illness or injury. They are vital policies for those with dependents and liabilities, paying out until you can start working again, or until you retire, die or the end of the policy term – whichever is sooner. They cover most illnesses that leave you unable to work, and you can claim as many times as you need to while the policy lasts.
  • Whole of Life Insurance – this cover runs throughout your life and will pay out a cash lump sum in the event of your death – often used to help pay inheritance tax bills

You may already have protection plans in place, but it is always worth reviewing them as your circumstances may have changed, your priorities shifted or there may be unnoticed gaps that can be bridged.

Putting in place sufficient protection will give you peace of mind if the worst does happen.


Avoiding the main financial planning pitfalls

We talk to people every day about efficiently saving their money and planning for the future. At the first meeting, we get the opportunity to look at their current financial plan, but just as importantly, we get to look back and understand how they have arrived at their current position.

Our experience has shown that people often make the following common financial planning mistakes early in their saving habits and financial decisions.


  1. Not understanding how much you need and when you need it

There’s often talk about saving for a rainy day, but sometimes people don’t have clear ideas about when the rainy day is and how much the rainy day will cost.

We often ask: “Why are you saving this money?” The most common response is: “I’ve always been taught to save.” Whilst this is not an inherently bad answer, it does highlight that the majority of us save without understanding specifically why we are saving.

With this in mind, how can you begin to plan for your financial future?

A few simple solutions to this are:

  • Understand when your ‘rainy day’ fund might be used. Is it:
    • When your children move out/finish university?
    • When you make your last mortgage payment?
    • When your work fundamentally changes and you begin seeking a career change?
  • Understand how much money you want when your rainy day comes along by thinking about what you will need to buy/fund at that particular point in time.


  1. Not taking advantage of tax-relieved savings/employer sponsored savings

Many clients think of employer pension plans as an additional expense that comes out of their wage each month, but the best way to think of it is as a salary uplift being put away for your retirement.

Do not opt out of employer pension schemes; even the smallest contribution can compound up into an additional source of revenue in retirement.


  1. Not thinking long-term

“Get-rich-quick schemes are for the lazy & unambitious. Respect your dreams enough to pay the full price for them.” Steve Maraboli, author and philanthropist

The above is a sentiment every Financial Planner will echo; individuals need to pay close attention to their financial plan and their financial future. After all, it’s their future.

Be prepared to put in the emotional effort and think about retirement. What is important to you and your family and what does your ideal retirement look like?

When you buy an investment, be prepared to hold that investment for 10 years. When you buy an investment fund and it goes down, great – buy more of it, it’s cheaper than it was previously.


We are here to help

Our dedicated Wealth Management experts are here to guide you through all your options and to help you make the right choices to ensure financial security.

For further information, please get in touch with your usual Azets advisor or a member of our Wealth Management team.


Financial protection policies 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.

This guide is for general information only and does not constitute advice.

Azets Wealth Management is a trading name of Azets Wealth Management Limited, which is authorised and regulated by the Financial Conduct Authority. Registered Office: Bulman House, Regent Centre, Gosforth, Newcastle upon Tyne, NE3 3LS. Company Number 05674020. Incorporated in England. Azets Wealth Management Limited is a subsidiary of Azets Holdings Limited.

About the author

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Geoff Cavanagh

Chartered Financial Planner
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