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  • So you've hit your 40s

    Are you hearing fanfares or alarm bells?

    Important information - The value of investments can fall as well as rise, so you could get back less than you invest. The information shown is not personal advice, if you are unsure if something is right for you, ask about financial advice. Once held in a pension money is not usually accessible until age 55 (rising to 57 in 2028).

    Live now, save for the future

    What to do with your cash

    In your 40s, there’s plenty of life left to live. But there are also financial responsibilities which may start to take their toll. Things like paying a mortgage or saving for children can be heavy responsibilities on their own, but they can be even harder to manage if other expenses come along at the same time.

    When you’re faced with making big decisions about your own future, and your family’s, it’s often worth getting a second opinion.

    A financial adviser can help you use your wealth and resources to make sure your money is going into the right places at the right time and that you’ve got an idea of when you might need to use that money. As with any good strategy, an adviser can also help you draw up contingency plans to help you deal with life’s little (or sometimes big) challenges.

    Looking after number one

    You could find yourself at or nearing the peak of your earning power in your 40s. This could mean you have more money left in your pocket.

    It could be all too easy to spend the money on things you’ll enjoy right now. It’s more difficult to take a long-term view and understand how you can put that money to work now to benefit your future.

    An adviser will get into the details of your goals and help you devise a strategy which helps you fulfil your responsibilities while remembering to live your life too.

    Clearing debt

    It’s another unpopular use for your money but reducing your debt is one of the most important ways to improve your financial resilience and put you in good stead for the future. It’s highly likely your mortgage will be the biggest debt you owe and also the hardest to pay off. You’ll need to work out how best to balance paying it off with early repayment charges and opportunities to remortgage.

    The key with paying off debt is doing it in priority order. Your adviser will help you put a plan together to clear debt with the highest interest rates first. Which may mean unsecured debts like credit cards get handled first.

    It’s easy to bog yourself down in the details of paying off debt. Particularly when it comes to timing it well. An adviser can help you understand how your debt impacts your financial plans.

    Don’t lose sight of your pension

    In your 40s, retirement can feel that little bit closer but still far enough away to not pay much attention to it. You may have been consistently paying in to a pension but your 40s are a good time to reassess where you’re invested and if you can afford to pay in more. If you haven’t assessed how much you pay in for a while, you might be earning enough now to pay in more and still have some money left in your pocket.

    Your attitude to risk and your expectations from retirement may have changed since you started paying into a pension or since choosing your investments. An adviser can help you take a step back and establish if you’re on track to retire comfortably.

    Don’t forget the little people

    If you have children, you may think they’re expensive enough as it is. But putting money away in a Junior ISA (JISA) can help with university fees or other costs in years to come from 18.

    Once again, it’s another thing to tuck money away for which may not be manageable along with everything else you need to use your money for in your 40s. But if you can afford to start chipping in, you can start with as little as £25 per month with an HL JISA.

    So, if you’d like to do this, an adviser can help you understand if this is the best way to go or if there’s a better way of supporting your children within your means.

    Have a backup plan

    Be prepared

    When life throws a curve ball at you, you need a plan B. Financially that means having enough in reserve to at least soften the blow. On the face of it, the advice may seem simple – tuck more money away. But when you’re also faced with tucking money away for all the other things we’ve mentioned, working out how much to tuck away and where isn’t as easy as it sounds.

    As a general rule, you should aim to have 3-6 months’ worth of regular expenses in instant access accounts if you’re working. That said, if your lifestyle suggests that you need to be even more careful, an adviser can help you with your contingency plan.

    Life insurance and critical illness cover

    Like a lot of insurance, it can feel like you’re paying for nothing – until you need it that is. Also like any insurance, you hope you’ll never need it. But for the sake of yourself and your family, it’s best to check your cover is appropriate.

    If you don’t have any life insurance, it can be a bit of a minefield not to mention expensive the longer you leave it. An adviser can help explain the different types of policy and if taking out life insurance is the right call at all.

    It’s also essential to have a Will and lasting power of attorney so you can have someone make decisions about your finances and care if you are no longer able to.

    Where do you start?

    If all this seems like a bit of a weight on your shoulders, a good place to start is getting in touch with our advisory helpdesk.

    If you feel like these sort of decisions are tough to manage all in one go, our helpdesk can help you understand if and how taking financial advice could help reduce the pressure. They’ll also tell you more about the process and the costs involved. It’s free to talk to them as no advice is given at this stage and there’s no obligation to take advice from one of our advisers.

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