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Financial security: for you and your family

11 November 2020: Ross Anders is a Financial Planner and Partner at Tilney Financial Planning Limited. In this sponsored article, he stresses how important it is to understand and protect your financial position and that of your family.

Who would have thought this time last year we would be having conversations about safeguarding individuals’ financial futures in light of COVID, five letters most of us had never put together before? Yet here we are with a new vernacular and, for many, a very different set of financial scenarios compared with those we were expecting.

Anders points out it is not just a significant proportion of the firm’s clients impacted by the pandemic: their families have also been hit. He points to more senior clients’ children and grandchildren, to the potential for redundancy and business difficulties, and to worries about the provision and cost of education.

“The starting point is to focus on yourself,” says Anders. “Look at your financial position. Look at your own balance sheet, assets, liabilities, and your net position. Then look at your cash position. Make sure all your affairs are in order first.”

Included in this thinking should be cash reserves, what to do about any identified shortfalls, and consideration of any protections you can put in place. 

“Next comes job security,” says Anders. “How secure is your job? What are the implications of redundancy? What is your notice period?” And let’s not forget that employment-related protection will be challenged by redundancy or business failure.

Then comes the healthcare part. “We all like to think we are invincible but clearly we are not. You need to ask whether you are up to date with all the legal issues such as wills and lasting power of attorney. A lot of people don’t like to think about these things but not doing so can cause a lot of heartache and headaches,” he says.

This takes us on to protecting families, which links back to understanding your position first and then asking how the steps you are taking impact your family in a positive way, and, as a corollary of that, by not taking action, what will be the negative impact for your family.

“How can I ensure that my family – whether that is a young child, a teenager, a young person or ageing parents – can benefit from my financial situation? How can I use my financial position in the best way possible to ensure that, during this uncertain time, I can actually provide some certainty for them?” he asks.

Anders talks about the potential for using your own asset base, built over many more certain years, to work in the interests of the family as a whole, perhaps a bit sooner than originally expected. “There are a number of options,” says Anders, “and it is good to know what they are.”

He continues: “It will include things like gifting lump sums, paying off debts, creating trusts, paying expenses, using pensions and those types of things.”

Anders reminds us that much of the reason for financial planning in the first place is to provide for a purpose, and often that purpose is the financial security of both individuals and their families, and to do so flexibly.

Access a range of resources, including webinars on financial security, investing through a crisis and wealth and wellbeing, on Tilney’s website. Click here for more details.