If you face a serious illness, it could place pressure on your finances and mean you’re not able to focus on what’s most important – your health. Yet, research suggests many families could be overlooking the protection that critical illness cover could provide. Read on to find out how critical illness cover works and how it could improve your financial resilience. 

Critical illness cover may pay out if you were diagnosed with a serious illness. It could help you pay off large financial commitments, such as your mortgage, maintain your lifestyle, or provide for dependants. 

Serious illnesses might be rare, but that doesn’t mean they won’t affect your family. According to Macmillan Cancer Support, someone receives a cancer diagnosis at least every 90 seconds in the UK. So, while you or a loved one falling ill might not be something you want to think about, taking steps to provide a safety net could be valuable.

Not having to worry about your finances should you fall seriously ill could support your wellbeing and mean you’re able to focus on recovering or adjusting your lifestyle. 

Despite the potential benefits, many families haven’t taken out or even considered critical illness cover. A survey published in IFA Magazine found that 73% of adults under the age of 40 don’t have critical illness cover to support themselves or their families, and more than half didn’t understand what it’s for. 

If you don’t already have critical illness cover in place, here are some of the essentials you need to know. 

1. Critical illness cover could pay out a lump sum

When the conditions are met, critical illness cover would pay out a lump sum. You can use this money however you wish. As you’ll only receive a single payment, you might want to consider how you’d use the money to create long-term financial security if you’re unable to return to work. 

When you take out critical illness cover, you can set how much you’d receive. So, spending some time understanding your finances and how you’d be affected if you were unable to work could be valuable. Reviewing your other assets or protection, and setting out what your priorities would be could help you select an appropriate level of cover.

Typically, the greater the potential payout, the higher your monthly premiums to maintain the cover will be. 

2. Not all illnesses would be covered

Critical illness cover will only pay out under certain conditions, and not all illnesses would result in receiving a lump sum. It’s important to understand how comprehensive critical illness cover is, as it can vary between providers.

According to a report in FTAdviser, half of people with critical illness cover are not fully aware of the conditions they would be covered for if they needed to make a claim. In many cases, families believed they had a greater level of cover than they did. It could mean their financial safety net isn’t as resilient as they believe, and they might face a shortfall at what may be an already challenging time.

As well as covering particular conditions, critical illness cover might specify severity too. For instance, a cancer diagnosis may not automatically result in a payout. Before you take out critical illness cover, it’s important to understand if it provides the protection you want and exactly in what circumstances you could make a successful claim. 

If critical illness cover isn’t right for you, there may be other options. For example, income protection would pay a regular income if you were unable to work due to an accident or illness and may cover more conditions.

3. There may be additional exclusions based on your health

In addition to understanding what conditions are covered, there might be further exclusions. Pre-existing medical conditions or illnesses that a close family member has been diagnosed with will likely be excluded. 

While it might be tempting to omit information, doing so could mean the cover is cancelled and a claim refused. 

4. A range of factors will affect the cost of critical illness cover

Many factors will affect the cost of maintaining your critical illness cover, from your health to whether you smoke. But with many providers offering cover from less than £10 a month, it could be cheaper than you think. 

It’s worth shopping around and comparing different providers. The premiums could vary significantly. However, the cheapest deal isn’t automatically the right option. For example, if the cover is less comprehensive than alternatives, it may not provide the peace of mind you want. 

5. In 2022, 91% of critical illness claims were paid 

While you might believe that providers don’t pay out when claims are made, the statistics paint a different picture. Data from the Association of British Insurers shows that in 2022, 91.6% of critical illness claims were paid – more than 19,000 families received a lump sum payment that may have helped them deal with a serious condition and challenging circumstances. 

Contact us to discuss your financial resilience 

Critical illness cover is just one way to create a safety net in case you fall seriously ill. There could be other steps you may take to improve your financial resilience too. Please contact us to discuss how you could provide financial security for you and your family. 

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

Note that financial protection plans 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.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

If you’ve come across the phrase “ESG investing” but weren’t sure what it meant or if it’s right for you, read on. You’ll discover what it means and some key considerations if it’s something you want to incorporate into your investment strategy. 

ESG investing simply stands for “environmental, social and governance” and involves considering factors from these three pillars alongside financial information when you’re making investment decisions.

It’s an approach to investing that’s been around for decades. Indeed, the initial concept of “ethical investing” is thought to have originated in the Quaker community in the 18th century. However, it’s only since around the 1960s that it started to become mainstream, and it’s gradually gained momentum in the decades since. 

It’s an approach that more investors could incorporate into their investment strategy in the future. According to a report in FTAdviser, more than half of investors plan to increase their ESG investments in 2024. 

ESG covers a broad range of categories 

The term “ESG” covers a huge range of categories that consider how a company operates. 

Under the environmental pillar, the following issues might be considered:

• Carbon emissions
• Deforestation 
• Waste management.

Social considerations may include:

• Data security
• Human rights within the supply chain 
• Customer satisfaction. 

Finally, governance might cover:

• Diversity of board members
• Executive pay 
• Political contributions. 

Factoring ESG issues into your decision-making process could help align your investments with your values. For instance, if you choose Fairtrade items when you’re grocery shopping because you want farmers to receive fair pay, you might consider how a company treats its employees and supply chains when you come to invest. 

Some opportunities use other phrases when they’re describing investment criteria. For example, an investment fund that’s focused on reducing its impact on the environment might use “green” or “sustainable”. Or if a business’s practices are scrutinised, it could use “corporate social responsibility” or “CSR”. 

Incorporating ESG doesn’t mean overlooking the finances 

Incorporating ESG principles into your portfolio doesn’t mean you overlook the financial side of the business or fund. After all, you still want to generate a return on your investment.

You might want to think of your portfolio as having a double bottom line – the returns you receive and the positive impact it could have on the world. So, making ESG part of your portfolio doesn’t have to mean settling for lower returns or adjusting your plans. 

In fact, some people argue that ESG investing could deliver greater benefits for investors as companies that have embraced ESG practices are more likely to be forward-thinking and prepared for potential government or economic changes.

Of course, investment returns cannot be guaranteed, and you should still ensure you understand the risk of investing in ESG opportunities and assess if it’s right for you. 

You can start ESG investing by buying stocks or using a fund

Much like when you invest without an ESG criteria, you can choose to purchase stocks and shares or invest in a fund. 

If you choose to invest in stocks and shares, you’d select which companies you invest in. Understanding if they meet your ESG criteria may be difficult, as there’s no standard way for businesses to report the information. You might also need to consider the individual risk of each stock and how to create a diversified portfolio that suits your needs. 

The alternative option is to invest in an ESG fund.

A fund would pool your money with that of other investors and then invest in a range of companies. As a result, using a fund may be a useful way to diversify your investments. The fund will define what its ESG focus is, and how it decides which businesses to invest in.

One thing to keep in mind is that, as ESG is so broad, it might be challenging to find a fund that matches your values exactly. So, you may need to compromise in some areas. 

Whichever option you choose, it’s essential you still consider the factors that you would when investing without an ESG focus, such as your investment time frame, risk profile, and how it fits into your financial plan. This can help you balance your ESG goals with your aspirations and circumstances. 

Contact us if you’d like to consider ESG factors when investing

Balancing ESG factors and the other considerations you might need to make when investing can be difficult. We’re here to offer support and could work with you to select investments that not only align with your ESG values but support your other goals too.

Please contact us to arrange a meeting to talk about your investment strategy. 

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. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

A will is an important way of outlining what you’d like to happen to your assets when you pass away. Yet, figures suggest will disputes are on the rise. If you’re worried about potential conflicts when you pass away, read on to discover some useful steps you might want to take. 

According to a report in the Guardian, thousands of families have been embroiled in disputes dubbed “ruinously expensive” by solicitors. As well as the potential legal costs, court cases can be emotionally draining and place pressure on your loved ones. 

In 2021/22, 195 disputes went to court, up from 145 in 2017. While the figure is low, it’s thought to be just the tip of the iceberg as many cases are settled out of court. Indeed, the report suggests that as many as 10,000 families in England and Wales are disputing wills every year.

A dispute could mean your assets aren’t passed on in a way that aligns with your wishes, or even that someone who you wanted to benefit from your estate is overlooked. If it’s a situation you’re worried about, here are seven steps you could take to reduce the risk of your will being overturned. 

1. Speak to loved ones about your wishes

Speaking to your family about your wishes can be difficult. Nonetheless, it could be an important conversation and mean there are no surprises when your will is read, which could reduce the chance of a dispute arising. 

If someone in your life discovers they will inherit less than expected or are not a beneficiary in your will after your passing, they may be more likely to react negatively – especially if they’re also grieving your loss. Discussing it during your lifetime could give them time to come to terms with the decision, as well as allow you to explain your reasons.  

2. Write a letter of wishes 

Similarly, you can write a letter of wishes that could be read alongside your will. This provides an opportunity to explain why you’ve made certain decisions, which could be useful for beneficiaries, the executor of your estate, and, if a dispute arises, the court. 

You should take care that the letter of wishes doesn’t contradict what’s written in your will – you may want to ask a solicitor to review it to minimise mistakes. 

3. Include a no-contest clause in your will

You could choose to add a no-contest clause to your will. It doesn’t mean that someone can’t raise a dispute, but it can act as a deterrent. Essentially, the clause means that if someone did challenge your will and lose their dispute, they would forfeit any inheritance they may have been entitled to. 

So, if you’re worried that a beneficiary could challenge your will to try and receive a larger proportion of your assets, adding a no-contest clause might be useful. 

4. Hire a solicitor to write your will

You can write your will yourself without any professional legal support. Yet, a solicitor could provide essential guidance and check the language of your will.

For example, if you’ve used vague or contradictory phrases, there could be a greater opportunity for disputes to arise. It could be particularly important if your estate or plans are complex. Choosing to hire a solicitor may help you feel more confident that your wishes will be carried out. 

5. Ask a medical practitioner to witness your will 

For your will to be valid, it must be made or acknowledged in the presence of two witnesses. To act as a witness, a person must:

• Be aged over 18 (16 in Scotland)
• Have the mental capacity to understand what they are signing
• Not be related to the person making the will or have a personal interest in the will.

However, if you’re worried that your will could be contested on medical grounds, you might want to ask a medical practitioner, such as your GP, to witness it. This could prevent later accusations that you weren’t of sound mind when writing your will.  

6. Regularly review your will

One of the reasons why a dispute may occur is that your beneficiaries don’t believe your will reflects your circumstances when you pass away. So, a regular review might be useful.

Going over your will every five years or following major life events could ensure it remains up-to-date. For example, you might want to make changes after you welcome a new grandchild into the family, remarry, or your wealth changes significantly. 

7. Store your will in a safe place 

Finally, make sure your will is stored in a safe place and your executor knows where it is. If you’ve rewritten your will, be sure to destroy previous ones to avoid potential confusion. 

Understanding your estate could help you make decisions about your will

If you’re deciding how to distribute your assets or need to update your will, understanding your estate could be an important step. Calculating the value of various assets and how they might change during your lifetime could alter how you want to pass them on. Please contact us to talk about your will and wider estate plan. 

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

The Financial Conduct Authority does not regulate estate planning. 

The State Pension is often a useful foundation when you’re creating an income in retirement. Yet, a survey from Just Group found that a third of people didn’t check their State Pension forecast before stopping work. 

While the State Pension might not be your primary income in retirement, it’s often valuable because it’s reliable – you’ll receive a regular income when you reach State Pension Age for the rest of your life. In addition, under the triple lock, the State Pension also increases each tax year, which could help maintain your spending power throughout retirement. 

So, if you’ve been neglecting your State Pension, it might be worth giving it some attention. Here are three practical reasons to check your State Pension before you retire.

1. The State Pension Age is rising and could be later than you expect 

The State Pension Age is the earliest date you can claim your State Pension, and it depends on when you were born.

Currently, the State Pension Age is 66 for both men and women. However, it is slowly rising. For those born after 5 April 1960, there will be a phased increase in State Pension Age to 68. So, the date you can claim the State Pension might be later than you expect. 

While further increases haven’t been announced by the government, there are expectations that the State Pension Age will rise again in the future as life expectancy increases. Indeed, the International Longevity Centre calculates the State Pension Age will need to rise to 71 by 2050 to maintain the current ratio of workers to retirees.  

Checking your State Pension forecast before you plan to retire could help you avoid a potential financial shock if you can’t claim it when you expect.  

2. You might want to fill in National Insurance gaps to increase your State Pension 

In 2024/25, the full new State Pension is £221.20 a week – more than £11,500 a year. However, to receive the full amount, you will normally need to have made at least 35 qualifying years of National Insurance (NI) contributions. If you have fewer qualifying years, you’ll often receive a portion of the full amount. 

If you’re not entitled to the full new State Pension due to gaps in your NI record, you may be able to buy additional years. In some cases, this could boost your income during retirement. 

Typically, a full NI year costs £824 and could add up to £302.64 each year to your pre-tax State Pension income. So, you may not need to claim the State Pension for long before you benefit financially. 

Before you fill in the gaps, you may want to consider your retirement plans. If you’re still several years away from retirement, you might reach the 35 qualifying years you need without making voluntary contributions.

You can usually only fill in the gaps in your NI record for the last six tax years. So, checking your State Pension forecast before you retire could identify a way to boost your income. 

If you want to make voluntary NI contributions, you’ll need to contact HMRC to get a reference and find out exactly how much filling in the gaps could cost you.  

3. Your State Pension could affect your wider retirement plan

Understanding how much you’ll receive from the State Pension and when you can claim it might play an important role in your wider financial plan. 

While the money you receive from the State Pension might not be your main source of income in retirement, it could provide a useful foundation to build on. By factoring it in, you might find that you’re on track for a more comfortable retirement than you expected, or that you could afford to withdraw a lump sum from your pension at the start of retirement to tick off bucket list items. 

Checking your State Pension forecast could mean you’re in a better position to make retirement decisions, including how you’ll use other assets to support your lifestyle goals. 

You can check your State Pension forecast quickly online 

Checking your State Pension forecast is often simple. You can use the government tool here or the HMRC app. You can also contact the Future Pension Centre if you’d prefer to receive the information by post, so long as your State Pension Age is more than 30 days away.

Get in touch to talk about your retirement income 

The State Pension is often just part of the income you’ll receive in retirement. We could help you create a retirement plan that brings together the different sources of income you might have, including workplace pensions, annuities, investments, property, and more. 

Please contact us to talk about your retirement plans and the support we could provide as you prepare for the next chapter of your life. 

Please note: This blog is for general information only and does not constitute advice. 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.