A Guide to Wealth Management for Young People
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Contents 04 The importance of financial planning for young people 06 Taking out a mortgage at a young age 09 Help to Buy ISA 11 The new Lifetime ISA 12 What young people should consider when starting a business 14 Why young people should consider life insurance 17 Starting a pension at a young age 19 It’s never too early to write a Will
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Quite simply, as a young person, the sooner you start thinking about your finances - both your current situation and your future objectives - the better. It is never too early to put the foundations in place that will help you build your financial strength, ensuring you are in a comfortable position in later life. At Equilibrium, we help clients who have amassed a significant net worth; if you would like to be in this bracket it is important to start planning ahead. We have compiled this guide, broadly aimed at people in the 25 to 40 age bracket, to help you consider the various components that will help you construct a robust financial plan. The guide also includes other considerations, such as pensions and life insurance that will impact your future finances and should be reviewed sooner rather than later.
Various topics are covered by chapter, including the importance of financial planning and choosing the right financial planner, buying your first home using a Help to Buy or Lifetime ISA, starting a business, taking out life insurance, building your pension and drawing up a Will. In order to match your ambitions and to put yourself in the strongest possible position, you will need to start making important decisions soon. This guide can act as a useful starting point.
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The importance of financial planning for young people Financial planning is a useful and necessary tool for any young person hoping to build and increase their assets in order to enjoy a more comfortable financial position in later life. It is also important that you choose the right financial planner, alongside the right cashflow modelling tool, to help you meet your long-term objectives. We explain more here. A young person’s long-term financial goals will often involve the building of assets in order to enjoy a secure financial future. However, many people between the ages of 25 and 40 are failing to put the building blocks in place to make this dream a reality. Most will envision a bright future, but many are not carrying out the necessary preparation. Financial planning is essential for effective asset growth and should not be delayed or ignored by any young person with big ambitions for the future. If you want to be comfortable in the years ahead, then now is the time to start taking action. By creating a sound financial plan today, you will have a greater sense of financial freedom tomorrow. With every aspect of your finances tailored to your ambitions, you can lay a pathway that is clear and easy to follow. The best way to ensure you’re on the right track is to get planning early. Speaking to specialist advisers is the first step to take. Together, you can create a bespoke plan that is finely tuned to match your personality and meet your objectives. Starting early will allow you to make the biggest difference to your future finances, encouraging you to save more and providing a realistic expectation of what’s to come.
Early financial planning will set you off on the right foot and ensure you’re doing all the basics right from a younger age, including saving, reducing debt, managing tax and making sound investments.
The benefits of cashflow modelling Cashflow modelling helps to bring your financial plans to life, giving you a clearer idea of your financial future and making sure your personal needs are being met. It is a way for advisers to demonstrate that the planning process places clients at its heart and strives to meet all of their objectives and aspirations. One cashflow modelling tool that presents financial plans in a clear and visually engaging way is Voyant. It is a system that forecasts income, expenses, assets and liabilities to help you better plan your future, and does so in an easy-to-understand way. By evaluating financial goals, attitude to risk and current circumstances, Voyant can also help you make the right asset investment decisions to help you meet your strategic goals. It also helps to minimise tax payments thanks to its various tax planning capabilities.
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Choosing a financial planner Deciding it is time to create a financial plan is one thing, but deciding on a financial planner - who will help you create the most effective and workable plan possible - is quite another. However, there are certain attributes that you should look out for in a financial planner to make sure they are the right choice for you - both now and in the future. A good financial planner will help you create a bespoke plan that is highly personalised to your circumstances. This is especially important for younger people, as the plan will need to take into
account current circumstances, outgoings and their aspirations, where they see themselves - and their asset levels - in the future. Choosing the right financial planner is therefore imperative, especially for you, as a young person, who will need to consider many different variables and the various changes in circumstances to come. The right planner will help you devise a financial plan that is tailored to your individual circumstances, needs and ambitions, which will guide you throughout your life and ensure all of your long-term goals are met.
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Taking out a mortgage at a young age There are no set rules for when you should take out a mortgage; whether now is the right time for you will depend on your own individual circumstances. However, if you are young and want to take out a mortgage, there are various factors you need to take into consideration. We explore these here. For many people, taking out a mortgage will be one of the most important financial decisions of their lives. For such an important decision, however, there are no guidelines setting out exactly when you should take out a mortgage, nor in what form. This is because, quite simply, when you decide to take out a mortgage will be dependent on your own circumstances, not least your relationship status, family, cashflow and job situations.
various options available to you. There are many different types of home loan, each with their own terms and conditions, and you need to decide which is the right fit for you. The cheapest option isn’t always the most sensible and you need to gather as much information as possible before making a decision. Seeking the right expert help can ensure you take out the deal best suited to you and your circumstances.
Many young people, especially those aged between 20 and 40, will likely have given some thought to when they would like to buy their own home. For some, it is something they will want to do as soon as they find a partner with whom they wish to settle down. Others will want a home to raise a family, while others may view homeownership as a more financially viable option to renting. Indeed, they may want to stop paying what they perceive as ‘dead money’ in order to pay towards an end goal of owning their own property.
When taking out a mortgage for the first time you will be classed as a first-time buyer. As a first-time buyer, there are various factors you need to take into consideration. For instance, you need to think about the amount of deposit you will need to buy a house, you need to make sure you are able to afford your monthly repayments and you need to account for any other costs associated with buying a home - such as mortgage arrangement fees, valuation fees and furnishing and decoration costs.
Conversely, some people may want to delay taking out a mortgage until they are in a better financial position, while others may prefer the flexibility of renting and others may not know what they want. Some may simply know that they don’t want to be pinned to one location just yet. In a nutshell, when you decide to take out a mortgage is completely up to you. If you do decide to take out a mortgage at a young age, as a great many people do, it is important that you do your research first and understand the
You then need to find the right mortgage for you. For people with low deposits looking to access the property ladder, the government offers the Help to Buy ISA, which provides those saving for their first home with a 25% government bonus up to a maximum of £3,000. To find out more about Help to Buy visit www.helptobuy.gov.uk. The Help to Buy ISA is due to be replaced by the Lifetime ISA in April 2017. You can find out more about the Lifetime ISA here. If you are looking at a higher deposit, there are various other first-time buyer mortgages
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available - you will have to decide on which is the right option for you. Interest rate is likely to be one deciding factor, and this comes in many different forms, the most common being – fixed, discount or tracker (but there are also others such as capped, offset and cap & collar). With a fixed rate, your mortgage will be fixed at a set interest rate for a certain length of time, a tracker offers a starting interest rate that moves according to the Bank of England’s base rate, similar to a tracker, a discount rate provides a discount off the lenders standard variable rate (SVR). Whilst the discount applied is set at the start, the SVR moves according to increases or reductions made at the lenders discretion. With expert help, you will be best placed to choose the most suitable option for you.
Is it the right time for you? Taking out a mortgage is a huge financial decision and not one that should be taken lightly. As a young person, you will need to think about it from many different angles, such as emotionally (are you ready for the responsibility and do you want to ‘settle down’?), practically (do you need to raise a family or lay some roots?) and financially (are you in the right financial position to make such a step?). With the help of a financial professional you can decide not only if you are ready to take out a mortgage, but how you should go about doing so. At Equilibrium, we do not offer advice on mortgages and the information contained in this guide does not constitute a recommendation. Equilibrium recommend contacting a qualified mortgage adviser before undertaking any financial commitment, please contact info@eqllp.co.uk or your adviser for more information about suitable professionals that can assist you with mortgage advice.
Should you pay your mortgage off early? If you have already taken on the responsibility of a mortgage, you may be considering how or in fact should you make an early repayment. A mortgage is often a person’s most significant monthly outgoing and it is only natural for some people to want to pay it off early. For a young person with specific financial ambitions who wishes to be comfortable in later life, making plans sooner rather than later to pay off your home loan can have obvious advantages further down the line. If you are unsure whether paying off your mortgage early should be a priority, you should consider whether you have any other more expensive debts that you should be paying off first - such as credit cards or loans. It is also worth considering whether you are paying enough into your pension scheme or whether you could get a savings rate that is higher than your mortgage rate. Whatever your circumstances a qualified financial adviser will be able to guide you through the management and repayment of debt, making sure that any repayment is suitable for your current circumstances. If you decide that paying off your mortgage early is something you want to do (and are able to do), it can be a great way to free yourself from a significant albatross around your neck and a step towards a more comfortable financial future. If you want any more information relating to the prioritisation and repayment of debt, or if you are struggling to meet your financial obligations, you can seek free impartial advice with any of the following organisations: � � � �
Citizens Advice Bureau National Debtline (0808 808 4000) Payplan (0800 280 2816) StepChange Debt Charity (0800 138 1111)
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Help to Buy ISA As a young person, one of the biggest hurdles you may face is having a sizable deposit to be able to secure a mortgage. If you’re a first-time buyer, there are schemes offered by the government to help first time buyers save enough towards their first home. The Help to Buy ISA, launched by the government in December 2015, can help you take advantage of taxfree savings and potentially boost your savings by 25% when you buy your first home to help you get that first foot on the ladder. This can be particularly useful in today’s low interest environment where cash held on deposit earns very little interest.
How it works If you choose to save into a Help to Buy ISA the government will top up your savings by adding a 25% bonus, up to a maximum of £3,000. A minimum bonus of £400 applies, so you will need to save at least £1,600 before qualifying for a 25% bonus. The maximum amount the government adds as a bonus is £3,000, and to receive this you will need to have saved £12,000 in the account. You can save up to £1,200 in the first calendar month of subscription and a maximum of £200 every month thereafter. Any interest earned on your Help to Buy ISA also counts towards your savings balance.
Who is eligible? All first-time buyers, who are resident in the UK for tax purposes and aged 16+, and buying a home worth up to £250,000 (£450,000 in London) can open a Help to Buy ISA. The Help to Buy ISA is available to each first time buyer, so if you are a firsttime buyer purchasing a house with another firsttime buyer you can both open an account to enable both parties to receive the bonus. You can use the Help to Buy ISA with any mortgage, you do not necessarily need to get a Help to Buy mortgage. To find out about more eligibility requirements you can visit the official government’s Help to Buy website: https://www.helptobuy.gov.uk/
Opening your ISA You can open an account with any bank, building society or credit union that offers a Help to Buy: ISA scheme. Currently, there are 27 providers signed up to administer the Help to Buy ISA, for an up to
“All first-time buyers, who are resident in the UK for tax purposes and aged 16+, and buying a home worth up to £250,000 (£450,000 in London) can open a Help to Buy ISA.”
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date list on which providers offer the scheme and how you are able to apply please visit https://www. helptobuy.gov.uk for more information. In addition to the Government website you can also utilise comparison websites, such as Money Savings Expert; these comparative tools are able show you the various products, providers and interest rates that are available, helping you to work out which provider is best for you. You will be able to open a Help to Buy ISA until 30 November 2019. After that date, Help to Buy ISAs will not be available to new savers, but if you opened your Help to Buy ISA before then you can continue saving into your account until 30 November 2029 when accounts will close to additional contributions. You must claim your bonus by 1 December 2030.
Claiming your bonus When you are close to buying your first home, you will need to instruct your solicitor or conveyancer to apply for your government bonus. Once they receive
the government bonus, it will be added to the money you are putting towards your first home. The bonus must be included with the funds consolidated at the completion of the property transaction. The bonus cannot be used for the deposit due at the exchange of contracts, to pay for solicitors, estate agent’s fees or any other indirect costs associated with buying a home.
Win win? If you are considering buying your first home but are worried that you might change your mind, it is worth bearing in mind that you can withdraw money from your Help to Buy ISA at any time (you just would not be able to claim your government bonus). With the minimum amount you need to save in the account to get a bonus being £1,600, even if you are considering buying your first house fairly soon a Help to Buy ISA still might be worth considering.
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The new Lifetime ISA The new Lifetime ISA - due to be launched in April 2017 - is designed to help you buy your first home, save for retirement or, for the savvy investor, do both. Available only to people between the age of 18 and 39, any money saved in a LISA before you turn 50 will not only receive the usual ISA tax-free growth but also receive an added 25% bonus from the government. The aim of the LISA is to help young people save flexibly during their lives. LISA savers will be able to contribute up to £4,000 a year, which the government will top-up with a 25% bonus. Bonuses will be paid annually in the first year, but from the 2018/19 tax year onwards the bonus will be paid every month, so that you benefit from compound growth. In contrast to the Help to Buy ISA, individuals can put in £4,000 in a lump sum or over a series of instalments across the year.
Helping you buy your first home By opening a LISA you can use the amount you have saved (plus the bonus on top) towards your first house up to the value of £450,000, after you have held the LISA for 12 months or more.
Similar to the Help to Buy ISA, the LISA is an individual product meaning that if you are a first-time buyer purchasing a house with another first-time buyer you can both open a LISA to reap the benefits. If you already own a Help to Buy ISA, you can transfer those savings into the Lifetime ISA in 2017, or continue saving into both. However, you will only be able to use the bonus from one towards buying a house.
Helping you save for retirement Similar to a pension, the LISA can also be a vehicle to save for retirement. The fundamental difference between the two is: with a pension, under current legislation you can enter retirement at age 55 to draw your benefits. With a LISA you are restricted to age 60 before you can withdraw the money with the 25% bonus. You are able to draw your money at any time before you turn 60, but you will lose the government bonus (and any interest or growth on this). You will also have to pay a 5% charge. To find out which might be most suited to you, you should seek financial advice to consider the different options and potential benefits.
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What young people should consider when starting a business Many young people have aspirations to set up and successfully run their own business, not just for the financial benefits but also for the pride and enjoyment it can bring. Here we look at some of the things you need to consider when starting a business. Owning your own business can be extremely challenging but also immensely rewarding. This is why so many young people take the entrepreneurial path and decide to set up their own company; running a successful business can lead to significant profit, enabling you to meet your long term financial goals. If you have high ambitions about your future assets, being a business owner can be the vehicle that helps you reach the destination. However, setting up a business is not just about making money; many people decide to go it alone for the satisfaction and pride that comes from being independent and making a success of something that is truly theirs. Others, meanwhile, spot a gap in the market and want to provide a service that is not readily available. Whatever your reason for setting up a business, it is important that as a young person taking on such a challenge you are aware of everything you need to know.
First steps Once you have an idea for a business, it is important to carry out the necessary research and testing to give you a better idea of whether there is demand for the service or product you are offering - and whether there is a good chance of you being successful. Be
sure to analyse the market thoroughly; while online research is a must, you should also get out there and do some field research, speaking to both those in the industry and any potential customers. Use your research to develop an effective business plan. This plan is crucial because it will form the basis of what it is you want to create and what you want to achieve. It will include important markers such as who you want to target and what your pricing points will be. It is also important at this stage to decide on your business structure - do you wish to be a sole trader? Part of a partnership? An LLP? A limited company? Each has its own benefits and drawbacks, and so choosing the one best suited to your business and your objectives is important. You will also, obviously, be required to come up with a name and logo for your business. This is the fun/ creative part, but remember it needs to be unique and should be relevant to what the business is and what it provides.
Finances and seeking expert help It is important to be careful with your money from the outset. Whether taking out a loan, using savings or receiving another form of financial help, seeking the right expert help will ensure your finances stay on track and in budget, helping you avoid the financial pitfalls that many startups encounter.
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On a personal level, it is also important to ensure that the success of your business, from a financial perspective, matches your own objectives. By speaking to the professionals, such as an experienced wealth management company, you can make sure that your personal financial plan is tied to your business financial plan and that the two go hand in hand. The success of your business and your own wealth accumulation are bound together, and seeking the right expert help can ensure you’re in a position to make the best of your personal finances, regardless of how well the business is doing.
Ask others for advice Which businesses (that you respect) are offering a similar service or product to the one you are planning? Make a list of the top 10 and contact the owners explaining that you are just starting out and would really appreciate their advice and support. Ask if they could spare 30 minutes to share some of their lessons and ask what they would do if they were you. You will be surprised by how many will be willing to share their time and expertise, and the advice you get could be invaluable.
For many, owning and running a successful business is the first step on the way to significant personal wealth accumulation; seeking the right guidance can help to smooth that path.
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Why young people should consider life insurance Life insurance is something many of us don’t think about until we’re older; however, taking out this type of cover earlier in our lives can be highly beneficial. Here, we explain why. Life insurance may not be a priority for most young people. However, it is something that those aged 25 to 40 may want to consider, especially if you have certain commitments and other people depend on you. If, for example, you have a partner, life insurance can provide a vital safety net that can help them out financially should anything happen to you. None of us know what will happen in the future and, while it is something we may not like to think about - especially at such a young age - injury or illness can affect anyone at any time. Life insurance means you will be able to look after the ones you love when you are unable to work and unable to rely on your usual source of income. Regardless of your age, it is something you may want to start taking more seriously, and becomes all the more important once you find the person you wish to settle down with. For example, should you decide to buy a house together, you’ll want to ensure that if something happens down the line and you’re not around to pay the mortgage, your partner - and potentially children - are not at risk of losing the house. Should you pass away, life insurance will play an important role in making sure your family is taken care of financially. This type of cover is also advisable for anyone, no matter their age, who has certain commitments to other people. For example, it might be a
consideration if you live with parents who are financially dependent on you, if you have other loved ones that you want to help financially, if you have to cover any care costs or if you run a business and have to think about its future.
Cost benefits One of the major benefits of taking out life insurance at an early age is the cost. Simply put, it is cheaper to take it out now than if you delay until later in life. This is because life insurance costs are calculated based on how much of a risk you are to the insurer and how likely it is that they will be required to pay out. If you are young and healthy, you will be deemed as less of a risk than someone who is older and faces health problems. Your premiums will therefore be cheaper.
Considerations Once you decide to take out life insurance, there are some other important decisions you will have to make. You will, for instance, need to think about how much you should insure yourself for. As a young person, your financial commitments may not be as high as you would anticipate them to be in the future - when you might have children (or more children), for example - and this increase should be accounted for.
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If you are in a relationship, you should also consider whether you wish to take out two separate policies, or a joint one. While the latter tends to be cheaper, the policy will end when the first person dies, and it could also pose problems should you choose to separate later in life. Additionally, you will have to think about what length of term you would like your policy to cover; ordinarily you would want this to last for the duration of your mortgage.
Critical illness cover Critical illness cover is a type of insurance designed to cover specific serious illnesses listed within a policy, and works by providing a tax-free lump sum to help pay for certain essentials - such as your mortgage, debts and house modifications - if you become seriously ill and unable to work. It covers certain critical illnesses including cancer, heart attack, stroke and renal failure, and is important because it will help you and your family should illness mean you are unable to do your job. Critical illness cover should be a consideration for younger people because, while we all like to think of ourselves as strong, fit and healthy - especially before we reach 40 - anyone can be hit by illness. As with life insurance, the younger you are when you get it, the cheaper it is. This is because it’s possible to get your premiums guaranteed at your level of entry, even if you later become very ill. You also have the option of having your premium reviewed at set times, usually every five years. If you suffer illness and haven’t taken out any cover, the illness will not be included in any policy you do have in the future.
either until you return to your job or you choose to retire and typically protects against either accident and sickness only, unemployment only, or accident, sickness and unemployment. You are able to protect up to 75% of your gross salary and you receive it in a tax-free monthly sum. It should be considered by any young people who would struggle to survive without an incoming salary, is self-employed or who has dependents. Many people only look to take out income protection after a major lifestyle event, such as the birth of their child or taking out a mortgage. However, you do not necessarily have to wait so long, and it may be a good idea to take this route if you have essential bills to pay and feel that you would not be able to survive on state support alone.
Is it the right time for you? Whether now is the right time for you to take out life insurance or not will depend on you, your financial goals and your current circumstances. If you have people who depend on you, who you want to be properly taken care of should anything unforeseen happen, then it is something to keep on your radar. Critical illness cover and income protection represent two useful options that could prove invaluable for you and your family later in life. Ultimately, it depends on your long-term financial plans and objectives, therefore discussing the possibility of Life assurance and the suitability of the various products available with a financial planner, could form a sensible part of your strategy.
Income protection Income protection represents a means by which you can receive regular income if you are unable to work due to sickness or a disability. It will continue
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Starting a pension at a young age Many young people delay thinking seriously about retirement until they’re older, but this can have a hugely negative influence on your financial position when you reach retirement age. Here, we discuss the benefits of starting your pension saving early. It may seem incredibly obvious, but when it comes to building a pension and saving for retirement, the earlier you do it, the better. It is obvious, however, for a very important reason - the more you save now, the more you will have at your disposal later. That said, many young people, especially those aged 25 to 40, do not give much thought to saving for retirement or do not believe they are in a position to do so; yet putting money away for the future has never been easier (or more important).
Automatic enrolment
Many people have high expectations regarding their financial position in the future, and if you’re aiming for a very comfortable retirement, then effective pension planning is imperative. What’s more, early pension saving has never been more important; the retirement age continues to climb, which means you need to save more now to make sure you can retire when you want to (and not when you’re told to), and life expectancy is rising, meaning you will have a longer post-work life and will therefore need more money to maintain your retirement lifestyle.
Those who will be automatically enrolled - and will have to opt out of the scheme if they do not wish to be a part of it - must be at least 22 years old and below state pension age, earn more than £10,000 a year, work in the UK and not already be in a suitable workplace pension scheme. Among the main benefits of the initiative are that your employer will match your contribution and, because payments qualify for tax relief, can represent a form of taxfree pay rise.
Relying on a state pension is unlikely to be enough, especially if you are working towards strict financial objectives, and while automatic enrolment may provide a helping hand or enable you to get started, there are other decisions to be made that can help you better meet your goals. This is where expert pension advice can prove invaluable.
Automatic enrolment is the name given to the requirement, as set out under the Pensions Act 2008, that every employer in the UK must put certain staff into a pension scheme and contribute towards it. It offers a very convenient way for employees to enter such a scheme. The initiative, which will apply to employers of all sizes by 2018, is designed to ensure workers are saving for their retirement sooner rather than later.
While automatic enrolment can act as a good starting point, it is important to have a clear idea of how it all works and how much you are contributing. You have the option to either increase or decrease the amount you pay in, which is something that should be seriously considered if you have a long-term plan for your pension and objectives you wish to meet.
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Setting up a personal plan
Setting goals and starting early
A personal pension plan represents a different pension saving opportunity, which can be particularly appealing if you have more ambitious plans for your pension pot or wish to have more control over how and what you save.
Not only should young people start their pension saving early, they should do it with certain goals in mind. These do not have to be clearly defined at this early stage, but it is important to have some ballpark figures of where you need to be with your contributions to meet general objectives - such as retiring at a certain age or living a certain type of lifestyle once you are in retirement.
Setting up a personal plan can be trickier than simply joining your workplace pension scheme, however, it is recommended that you seek the help of an expert financial adviser or wealth management company to make sure you choose a plan that is right for you and will help you meet your goals. There are various types of plan from which you can choose, including: Standard personal pensions - These are usually chosen to match your attitudes to risk and your specific needs, and usually involve regular monthly payments into your plan SIPPs - Self-invested personal pensions provide greater control over investment of your pension savings and are often used when larger contributions are made and offer a wider range of investment choices
Remember, if you put less away now, you will need to pay more in the years leading up to your retirement. By planning early, you can make sure that your pension saving - in whatever form it takes - is setting you on the right path to the retirement you are dreaming of. For more information on Auto Enrolment or the other pension plans that may be suitable for you needs, please speak to a qualified pension expert or visit any one of the following websites: Nestpensions.org Pensionwise.gov.uk
Stakeholder pensions -These include a default investment strategy, low minimum contributions and charges are often limited If you do opt for a personal plan, you will need to decide how to invest your pension savings, which will involve choosing from a range of funds, each with their own investment profile. Your choice will likely be dependent on your attitude to risk and whether the potential growth matches up with your objectives. It is therefore imperative that you have the right guidance when making such an important decision.
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It’s never too early to write a Will The thought of writing a Will is something many young people either recoil from or put off until later in life. While this is understandable - not many of us like to think about our own death - it is never too early to think about creating a Will, especially as none of us know what will happen in the future. As long as you are over 18, making a Will should be a consideration in your long-term financial strategy. Why do we delay making a Will? Many people mistakenly believe that making a Will is something they only need to do when they’re older. It may be true that making these arrangements becomes all the more pressing as we age, but doing so earlier can ensure you are in an organised position going forward, safeguarding you and your family should life take any unexpected turns (as it is prone to do).
Some young people may not wish to think too much about death because they find it a particularly morbid topic. Some may claim they simply haven’t got round to sorting it, while some may not fully understand the process, and others do not think they have built up enough assets to warrant the need for a Will. Every one of these excuses, however, can and should be overcome, especially if you hope to grow - and protect your estate.
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As a young person, it is possible you are not averse to trying high-risk activities, such as skiing, climbing and bungee jumping, and may even actively seek a high adrenaline lifestyle. This makes it all the more important to have the added safety net of a Will for your family should anything go wrong. A will can also ensure that your digital assets are protected, this includes online banking, social media accounts, photographs or documents stored in clouds, code that you have written, websites, email accounts, gaming accounts and domain names. An inventory in your Will could make locating and deleting your digital assets easier for your executors.
Making provisions for others
Making provisions for the future
Should you live with a partner but are not married, your partner will not be entitled to anything in the event of your passing; the only way to allocate part of your estate to them is by expressing these wishes as part of your Will.
If you are a young person and have plans to significantly build your assets over the years to come, it is necessary to make provisions for the future. It is important to safeguard what you have, and this extends to what happens to your estate once you pass away. Should you die without a Will, your estate will be dealt with under the intestacy rules, whilst the exact rules differ between England & Wales, Scotland and Northern Ireland, this ultimately could result in unintended people inheriting from you. By making a Will, you give yourself the opportunity to appoint the people whom you wish to be the executors of your Will. This is a very important role because it involves dealing with your estate in full when you die. If you have not appointed an executor, it is much more likely that your estate is divided up in ways that you would not have been happy with.
Making a Will becomes all the more important if you have people who depend on you, such as children or a partner. Young people who have started a family will want to make sure that their loved ones will be properly looked after when they die, and a Will plays a crucial part in this. If you have children, making a Will allows you to appoint a guardian to look after them and trustees to look after their money. If you pass away without a Will, this will be decided by the rules of intestacy.
Alongside family members, you may also want to ensure provisions are put in place to benefit any pets you have. It may be horrible, but it is also necessary to think about what will happen to your pets should anything unforeseen happen to you.
Time to write your Will? With Will writing, it is often a case of the sooner, the better. Planning ahead and preparing for the future will stand you in good stead, especially if you have designs of significantly growing your assets in the years ahead. Making a Will and making regular revisions can ensure you’re looking after your loved ones and, crucially, not leaving anything to chance.
For more information on making a will please ensure that you seek the advice of a qualified professional. For more generalised information on wills and inheritance, please visit the gov.uk website 20
Next steps There are many factors to take into account when planning for a successful financial future. It is never too early to start thinking about the important decisions that will have a marked impact on your future financial position and that of your family, be it the contributions you make towards your pension or what you want to put in your will. Many people hope for a successful working life followed by a comfortable retirement, and by setting the wheels in motion early you can set yourself in the best possible position for reaching your end goal. If you are ambitious in what you want to achieve and as with most things in life - success is borne out of preparation; by taking action today you are closer to meeting your objectives tomorrow.
and our understanding of current regulations, when making a financial plan, it is not a substitute for advice in any particular case; with the help of the right financial planner or wealth management company you can construct a tailored, bespoke plan that evaluates your current position and future objectives, and steers you in the right direction to ensure they are met.
An integral part of this preparation is building, then following, a financial strategy that will give you the best chance of achieving both your short and long term goals. Whilst this guide aims to provide you with an overview of some of the key considerations
It can be all too easy to put off until tomorrow what you could do today. However, when it comes to important financial decisions, there’s no reason to delay.
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Equilibrium Asset Management LLP (a limited liability partnership) is authorised and regulated by the Financial Conduct Authority. Equilibrium Asset Management is entered on the Financial Services Register under reference 452261. The FCA regulates advice which we provide on investment and insurance business; however it does not regulate advice which we provide purely in respect of taxation matters. Copyright Equilibrium Asset Management LLP. Not to be reproduced without permission.
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