It doesn’t matter how much you prepare; sometimes unexpected life events could mean your carefully laid plans go awry. While you can’t know what’s around the corner, you can change how you respond to unpredictable events to help keep your financial plan on track.

A life event could have a huge impact on your wealth, both now and in the future. Circumstances outside of your control might even lead to you changing your long-term goals. So, even if you already have a robust financial plan in place, a review following major life events could be helpful. 

Here are four unpredictable life events you might have experienced that could mean you’d benefit from updating your financial plan. 

1. Experiencing redundancy

Redundancy could have a huge effect on both your short- and long-term finances.

In the short term, you might need to dip into savings or other assets to cover your essential outgoings. As you may stop contributions towards your long-term goals, such as adding to your pension for retirement, it could also mean you face an unexpected shortfall in the future. 

You might also receive a redundancy payout, which you want to understand how to use to improve your financial security. 

According to data from the Office for National Statistics, around 3.4 employees in every 1,000 were made redundant between March and May 2024. A separate poll from SurveyMonkey also found that 58% of employees feel uncertain about their future job security. 

If you’ve been made redundant, a financial review could help you identify ways to manage your finances while you search for employment, and then assess the potential long-term impact. 

2. Taking time off work due to an accident or illness

Needing to take a long time off work due to an accident or illness could leave you in a financially vulnerable position. Much like redundancy, it could affect both short- and long-term finances. 

You might think the chances of you being unable to work for an extended period are slim. However, figures released at the start of 2024 and published in the Guardian, highlight how many people are affected by unexpected illnesses. According to the data, 2.8 million people were not working due to long-term sickness at the start of the year. 

If you’re unable to work, a financial review could help you assess how to use your assets to create a regular income to cover essential outgoings. It might also consider how you could keep long-term goals on track. 

3. Separating from your partner

Whether you’re married or not, separating from your partner may have large implications for your financial security. Separating when your finances are intertwined could have a substantial impact on your household income, regular expenses, and even long-term wealth creation. 

Indeed, research led by the University of Bristol found that equal division of joint assets, including property and pensions, was not the norm during divorce. It only occurred in around 3 in 10 cases. This means that one person was likely to miss out financially.

Working with us to assess your financial plan following a separation could help you understand how your assets have changed and what steps you might need to take to improve your financial resilience. 

A financial review isn’t just useful for assessing your assets. Following the breakdown of a relationship, your lifestyle goals and long-term aspirations might have changed too. So, updating your financial plan could ensure it continues to reflect the future you want. 

4. Receiving an inheritance 

Unexpected events don’t always harm your finances. Indeed, if you receive an inheritance or a windfall, it could provide you with greater financial freedom than you previously had.

Receiving a large lump sum out of the blue might feel overwhelming, especially if it’s through an inheritance and you are dealing with the loss of a loved one. When you’re ready, seeking tailored financial advice could help you understand how to use the wealth in a way that aligns with your goals. 

Have you experienced an unexpected life event? Contact us to review your financial plan

Whether you’ve experienced one of the four unexpected life events listed above or you’ve been affected in another way, we could help you assess your financial plan to ensure it continues to reflect your new circumstances. Please contact us to arrange a meeting with one of our team. 

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The value of pensions and any income from them can fall as well as rise. You may not get back the full amount invested.

Interest rates and inflation continued to affect markets around the world in April 2024. Read on to find out what else may have affected investment markets and your portfolio in April.

Expectations of interest rate cuts were good news for gold. Investors who feared falling interest rates would lead to lower returns on cash and government bonds purchased more gold. It led to the asset hitting a record high on 8 April at $2,535 (£3,171) an ounce.

Yet, while many experts are predicting that interest rates will fall, Kristalina Georgieva, the managing director of the International Monetary Fund, warned that central banks must resist pressure to cut them too soon.  

UK

The UK ended 2023 in a technical recession – defined as two consecutive quarters of economic contraction. The latest figures suggest the UK is already out of the recession. According to the Office for National Statistics, GDP grew slightly by 0.1% in February 2024, following 0.3% growth in January.

UK inflation data was also positive. Inflation in the 12 months to March 2024 was 3.2%. While there’s still some way to go before reaching the Bank of England’s (BoE) 2% target, it’s the lowest figure recorded since September 2021. 

Clare Lombardelli, the newly appointed BoE deputy governor, tempered the news by adding that inflation is likely to be “bumpy” as pricing behaviour isn’t smooth. However, she added that the overall experience for people should be lower and more predictable inflation. 

On the back of good news and with a general election looming this year, chancellor Jeremy Hunt told the Financial Times that he’d like to cut taxes in the autumn fiscal statement “if we can”. 

While inflation overall is falling, business group British Chamber of Commerce has warned that new Brexit fees and checks could lead to higher food prices in the UK. Importers of animal products from the EU will face an additional charge from 30 April 2024 and new checks will be applied from October.

Data from S&P Global’s Purchasing Managers’ Index (PMI) also indicates that growth will continue. The service sector continued to expand in March and the construction industry returned to growth thanks to increased work in infrastructure projects. 

Official data shows average wages, excluding bonuses, increased by around 6% between December 2023 and February 2024. Once inflation is factored in, average wages increased by 2.1% in real terms.

Yet, other information suggests many households will continue to financially struggle. A BoE report suggests it expects the number of households and small businesses to default on debt to rise this summer. 

A report from consultancy firm KPMG also found that half of consumers are cutting back on non-essential spending. In fact, just 3% of consumers said they had been able to spend more in the first quarter of 2024. Eating out is the most likely expense to be cut from budgets, which could negatively affect the hospitality sector. 

In April, the FTSE 100 proved why investors need to be prepared to weather market volatility.

On 12 April, the index of the 100 largest companies on the London Stock Exchange closed at the highest level for over a year. News that the UK is likely to have exited a recession led to the index rising by 0.9%. 

However, just days later, on 16 April, the index tumbled by 1.95% and almost every stock on the index was in the red, with mining companies and banks suffering the largest falls. The downturn was linked to a market adjustment after the US Federal Reserve said it may not cut interest rates as soon as it hoped.

Then there was another turn as the FTSE 100 hit a record high of 8,068 points on 23 April due to expectations that the BoE will start cutting interest rates this year and fears about escalating tensions in the Middle East eased.

The ups and downs serve as useful reminders to focus on the long-term performance of investments rather than short-term market movements. 

Europe

Inflation across the eurozone fell by more than expected to 2.4% in the 12 months to March 2024. Despite optimism that interest rates would be cut, the European Central Bank opted to hold rates. Yet, the bank did signal that, if inflation continues to fall, it could cut them in the summer. 

PMI data indicates that the eurozone economy returned to growth for the first time since May 2023. The positive figures were driven by stronger than expected output from the service sector, with Spain and Italy providing the strongest boost. However, the two largest economies in the bloc, Germany and France, contracted. 

Some EU countries, including Italy and France, could be put under an infringement order procedure for operating budgets with deficits that breach the EU’s rules. Usually, governments have to keep budget deficits below 3% of GDP. The cap was set aside during the Covid-19 pandemic but could be implemented again, which might place pressure on public spending plans. 

Similar to the UK, European indexes suffered on 16 April when the Federal Reserve indicated it wouldn’t cut interest rates soon. France’s CAC index fell 1.8% and Spain’s IBEX was down 1.2%. 

US

The US private sector added 40,000 more jobs than expected in March 2024, with businesses hiring an additional 184,000 employees. Job growth is one of the measures the Federal Reserve will consider when deciding whether to cut interest rates, so the data led to speculation that rates would fall soon. 

Yet, when the rate of inflation was released, it dampened the optimism. In the 12 months to March 2024, inflation was 3.5%, an increase when compared to the 3.2% recorded a month earlier. 

Investment markets did benefit when fears that Iran’s attack on Israel would lead to an escalation in the Middle East didn’t materialise. On 15 April, the Dow Jones saw a rise of 0.9%, while the S&P 500 increased by 0.7%, and tech-focused index Nasdaq was up 0.6%. 

Asia

China beat its GDP forecast when it posted growth of 5.3% for January to March 2024 when compared to a year earlier. However, China’s National Bureau of Statistics recognised that growth could be hampered. The organisation said the external environment was becoming more “complex, severe, and uncertain”. 

Indeed, the country faced several headwinds in April.

First, credit rating agency Fitch has cut the outlook of China’s debt from “stable” to “negative”, as it said the country was facing uncertain economic prospects. 

Then, US treasury secretary Janet Yellen voiced concerns that China’s excess manufacturing capital could cause global fallout. She said China was too big to rely on exports for rapid growth and excess capacity was putting pressure on other economies.

While Yellen didn’t make any announcements about trade tariffs on Chinese goods, she said she would not rule out taking more action to protect the US economy from Chinese imports. 

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

The taxation of the investment is dependent on the individual circumstance of each investor, and may be subject to change in the future.

When you received your last promotion or pay rise, your first instinct might have been to celebrate by splashing out on a new gadget, booking a holiday or allocating more of your money to your disposable income. However, if you overlook reviewing your finances, “lifestyle creep” could affect your ability to reach long-term goals, including your retirement plans.

Lifestyle creep leads to your regular expenses rising

Lifestyle creep refers to your regular expenses rising in line with your income. So, after you’ve received a pay rise, your outgoings would start to creep up.

It can be more difficult than you expect to spot lifestyle creep. It might be as simple as choosing a more expensive bottle of wine when you’re at the supermarket or stopping by a café on the way to work each morning to pick up a latte. It could include larger expenses too. Perhaps you start to upgrade your phone every year instead of every three years, or eating out becomes a regular habit rather than a treat. 

Over time, lifestyle creep can lead to former luxuries becoming your new essentials. If you don’t keep an eye on your budget, the amount you spend could rise much further than you expect. 

According to a survey carried out by Aqua, 89% of Brits say they exceed their social budgets every month. The average person is spending around £61 more on social activities than they plan for. 

When you consider how lifestyle creep could affect other areas of your spending, it’s easy to see how it could lead to your regular outgoings rising by far more than you initially thought.

On the surface, lifestyle creep might seem like it’ll have little impact. After all, the £3.50 you might spend on a coffee during your commute is small change. Yet, grab a coffee three times a week, and you’ve added almost £550 to your expenses over a year.

Increased spending means you can become dependent on a higher income. Once you’ve established a habit of spending more, it can be difficult to go back to your original budget. 

Lifestyle creep could mean you don’t save as much for your retirement 

Small rises in your regular outgoings might seem relatively small in isolation, but when they’re combined, they could add up to thousands of pounds unwittingly spent every year.

As a result, you might divert a smaller portion of your new income to your retirement. Contributing less to your pension, investment portfolio, or savings could have a much larger effect than you first believe, especially once you calculate the returns you’ve potentially missed. 

Another way lifestyle creep could affect your future is by changing your desired retirement income.  

According to a 2022 survey published in FTAdviser, the top retirement aspiration among those nearing the milestone is to maintain their standard of living. If your regular expenses have crept up during your working life, your pension might need to provide a greater income than you’ve previously calculated.

As a result, some retirees could find they face an income shortfall in retirement or risk using their pension too quickly and running out of money later in life. 

A financial plan could help you strike a balance between enjoying today and securing your future 

While lifestyle creep may be harmful to your long-term plans, you don’t have to put all your new income to one side for the future – it’s about striking a balance that suits you.

From planning an annual holiday to an exotic location to days out with your family, there are lots of ways you might plan to spend a pay increase. Making these expenses part of your overall financial plan could help you assess what’s right for you. 

It may be worth considering which expenses add joy to your life when you’re prioritising them. For example, a cup of coffee on the way to work might become a habit that doesn’t improve your mood or outlook. On the other hand, regularly buying a coffee as you catch up with friends could be an important part of your social routine that you look forward to. 

Creating a financial plan and being aware of lifestyle creep is about more than cutting back your expenses. It’s about being intentional with how you use your wealth now and in the future.

Contact us to talk about your finances and how to avoid the negative effects of lifestyle creep 

If you’ve received an income boost or would like to review your finances, we could assist you in formulating a financial plan that could help secure the lifestyle you want. Please contact us to arrange a meeting. 

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The value of pensions and any income from them can fall as well as rise. You may not get back the full amount invested.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.  

Britain’s housing stock has been dubbed the “worst value for money” in a Resolution Foundation report. With the media reporting that the UK is in the midst of a housing crisis, you might not be surprised by the news, but how the UK compared to other countries could still shock you.  

Read on to find out more about the research conclusions and why soaring house prices could mean it’s more important than ever that you secure a competitive mortgage. 

British property buyers are “paying more for less” 

Many other countries are battling a housing crisis too. In a lot of developed countries, demand for property is outstripping supply and it’s led to climbing house prices, even after concerns that the Covid-19 pandemic and rising interest rates would lead to a fall. 

Across almost every metric the Resolution Foundation measured, including housing costs, floor space, quality, and wider price levels, the UK fell short. Indeed, the study found that Brits are “paying more for less” and the UK housing stock offered the “worst value for money of any advanced economy”. 

UK homes were found to be some of the smallest among the countries included in the report. Indeed, the average floor space per person in the UK is 38m2. That’s significantly smaller than many similar countries, including the US, Germany, France, and even Japan. Indeed, even properties in high population density New York were found to offer a more spacious 43m2 per person. 

It’s not just the space that could present challenges for UK homeowners – the UK’s housing stock is also the oldest of any European country. 

The Resolution Foundation report noted that more than a third of homes in the UK were built before 1946. In comparison, the number of homes built before the end of the second world war is just 21% in Italy and 11% in Spain. 

As older properties tend to be poorly insulated when compared to newer counterparts, Brits could be paying higher energy bills as a result and might be more likely to face damp issues. 

With a general election set to be called this year, the housing crisis could become a key topic during election campaigns. 

Rising house prices could mean a competitive mortgage is crucial for your budget 

If you’re looking to purchase property, news that the UK’s house prices are high can be frustrating. 

Signs suggest the market is slowing – house prices fell by 1% in March 2024 when compared to a month earlier, according to the Halifax House Price Index. However, experts aren’t predicting a sustained fall. Indeed, Halifax noted that house prices have shown “surprising resilience” in the face of higher borrowing costs due to interest rates rising. 

There might be little you can do to bring down house prices, but you could save money by choosing a competitive mortgage deal.

Even a small decline in the interest rate you’re paying could cut your household's outgoings in the short term and really add up when you calculate how much interest you’d pay over the full mortgage term. 

The table below shows how the interest rate would affect your expenses if you borrowed £250,000 through a 25-year repayment mortgage.

Source: MoneySavingExpert 

As you can see, taking some time to secure the right mortgage deal for you could reduce your regular outgoings and potentially save you thousands of pounds over the full mortgage term.

Considering how lenders may view your application could be worthwhile. For instance, are there any red flags on your credit report that might mean a lender offers you less competitive terms or even rejects your mortgage application?

Identifying the lenders that are more likely to offer you a lower interest rate could be useful too. According to the Bank of England data, there are around 240 regulated mortgage lenders and administrators operating in the UK. So, shopping around might lead to a deal that’s better suited to you.

Understanding the lending criteria of each lender can be difficult, but may be important for assessing how likely they are to approve your application. An independent mortgage adviser could search the market on your behalf to find a lender that may be right for you – it could make securing your new property or mortgage smoother and less stressful. 

Contact us to talk about your mortgage needs

If you need to find a mortgage that suits you, we could help. We’ll work with you to understand your needs and provide support throughout the mortgage application process. Please contact us to arrange a meeting. 

Please note: This blog is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.

The information and guidance provided within this blog is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Not all mortgage contracts are regulated by the Financial Conduct Authority.