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Taken out a new mortgage? Don’t forget to review your financial protection

Taking out a new mortgage deal could represent a shift in your financial commitments. So, reviewing whether your financial protection is still appropriate could ensure you have a vital safety net should you face a shock.

Read on to learn how financial protection can provide security in unexpected situations, and what to consider when taking out new cover.

Financial protection paid out a record £8 billion in 2024

Financial protection could provide a much-needed cash injection when you or your loved one experiences a financial shock.

Indeed, in 2024, insurers paid out a record £8 billion in financial protection claims, according to data released in July 2025 by the Association of British Insurers (ABI).

There are several types of financial protection that you might want to weigh up as a homeowner. The three main options are:

1. Income protection

If you’re unable to work due to an illness or accident, income protection would pay you a regular income until you return to work, retire, or the term ends. This income is usually a portion of your salary, such as 60%.

Income protection could help you cover financial commitments, including mortgage repayments, if your regular income stops. The ABI figures show the average amount paid through income protection was £25,133.

2. Critical illness cover

If you’re diagnosed with a covered critical illness, this form of financial protection would pay you a lump sum. According to the ABI statistics, the average amount claimed was £68,735.

You can use the lump sum however you wish. So, you might use it to cover your regular outgoings while you take time off work, adapt your home if necessary, or pay off your mortgage.

3. Life insurance

Life insurance would pay out a lump sum to your beneficiaries if you passed away during the term. It could provide your loved ones with financial security while they are grieving.

You can choose the level of cover to suit you and your family. For example, you might opt for an amount that would pay off your mortgage to reduce your family’s financial commitments.

The ABI figures show 96.5% of life insurance claims were upheld in 2024, and the average claim was for £79,703.

Your circumstances will affect the type of financial protection that’s right for you

If you’ve taken out a new mortgage, review your current financial commitments and consider when and how financial protection could benefit you.

For example, if you’re a homeowner with limited savings, income protection could be a valuable option.

According to a May 2025 article in Cover Magazine, 14% of mortgage holders would immediately struggle to pay their mortgage after income loss. As a result, they could be at risk of losing their home if they haven’t taken other steps to create an income stream.

Alternatively, if you have a family that relies on your income, life insurance may be a priority to protect your loved ones.

In July 2025, a Which? article noted that more than half of people in the UK don’t have life insurance in place, potentially leaving households at risk of financial hardship if they were to die unexpectedly.

Depending on your needs, you might find that you’d benefit from taking out more than one type of financial protection.

3 other factors that might affect which financial protection is right for you

Before you take out new financial protection, check these three areas. They could affect the type and level of cover that’s right for you.

1. Review existing cover

Take some time to review what cover you already have in place.

Even if you haven’t taken out financial protection directly, you could still have some cover. For instance, if your employer provides a death in service benefit, you might not need to take out life insurance as well.

2. Check your employer’s sick pay policy

In 2025/26, Statutory Sick Pay is just £118.75 a week and is paid for up to 28 weeks. As a result, most families would struggle if they relied on this alone, making income protection an attractive option.

However, many workplaces offer an enhanced sick pay policy, so it’s worth reading your contract or employee handbook. Check what portion of your salary you’d receive if you were unable to work and how long it would be paid for.

You could select income protection to complement your sick pay. For instance, if you’d receive a salary for six months, you could select income protection with a six-month deferment to reduce premiums.

3. Assess your other assets

Look at your wider finances when assessing financial protection – what assets could you use if you faced a financial shock?

If you have a substantial emergency fund, you may reduce the level of cover. However, if your assets are earmarked for other purposes, like retirement, you might want to consider the effect depleting them now could have on your future financial security.

We can help you create a reliable financial safety net

As part of your long-term plan, we can work with you to create a safety net you and your loved ones can rely on, including taking out appropriate financial protection. Please contact us to arrange a meeting.

If you have any mortgage related queries please get in touch

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.

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

Note that life insurance and 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.

Explained: How remortgaging works and why it’s important

Remortgaging is a task most homeowners will do at some point. Yet, it can seem complex or something that isn’t that important. Read on to learn how remortgaging works and why it could save you money.

When taking out a mortgage, you’ll choose the term length, the length over which you repay the loan. First-time buyers traditionally opt for a 25-year term, but it’s possible to repay a mortgage over 40 years in some cases.

However, the interest rate you’re offered won’t usually last for the full term of the mortgage. Instead, the deal will expire after a defined period, most commonly two, three, or five years.

When your mortgage deal expires, you can remortgage without paying an early repayment charge (ERC) either with your current lender or a new one. One of the main reasons homeowners remortgage is to save money.

Remortgaging could save you thousands of pounds over the full mortgage term

Typically, when your mortgage deal expires, you’ll move on to your lender’s standard variable rate (SVR). If you continued to make repayments, you’d still pay off the mortgage at the end of the term.

However, the SVR isn’t normally competitive, so it could mean you’re paying far more in interest.

As you often borrow large sums over an extended period through a mortgage, even a small difference in the interest rate could mean you save thousands of pounds.

Imagine you’ve borrowed £250,000 through a repayment mortgage and you have 20 years remaining on the term. If your lender’s SVR is 6%:

Your monthly repayment would be £1,791
Over the full mortgage term, you’d pay almost £180,000 in interest.

Now, if you search for a new mortgage deal when your previous one expires and secure an interest rate of 4%:

Your monthly repayment would fall to £1,514
Over the full mortgage term, you’d pay around £113,500 in interest.

So, in this scenario, taking the time to remortgage would save you more than £65,000.

While your interest rate is likely to change several more times throughout the remaining 20-year mortgage term, the figures illustrate the power of remortgaging. Paying less interest could help you become mortgage-free sooner or allow you to pursue other goals.

3 more practical reasons to remortgage

Saving money isn’t the only reason to remortgage. Here are three more reasons to check when your current deal expires and prepare to find a new deal.

1. You may choose to fix the interest rate

As the name suggests, the interest rate if you’re paying the SVR is variable. This means it could rise or fall, which would affect your repayments.

When you remortgage, you might also want to consider whether a fixed-rate mortgage is the right option for you. This would mean the interest rate you pay is fixed for the duration of the mortgage deal, which can be useful for budgeting.

2. You can change your mortgage term

Remortgaging is an excellent opportunity to assess if the mortgage term is still right for you.

If you want, you can shorten the term, which would mean you repay the debt sooner. Alternatively, if you want to reduce your outgoings, you might extend the term. Keep in mind that repaying over a longer term usually means paying more interest overall.

3. You might be able to release equity from your home

As you make mortgage repayments or the value of your property rises, you build up equity in your home. Depending on your circumstances, you might be able to release some of this equity to fund a renovation project, consolidate debt, or cover other expenses.

While this can be a tempting option, this increases the amount you borrow, meaning higher repayments and more interest over time.

You’ll usually need to complete a mortgage application to access a new deal

The process for remortgaging is similar to taking out a mortgage for the first time.

Comparing lenders can help you secure a competitive interest rate. As a mortgage adviser, we can help you assess the options and which lenders are likely to approve your application.

Usually, you’ll need to apply for a mortgage, including proving that the repayments are affordable. Again, we can lend support here when you’re completing the paperwork to ensure the process is as smooth as possible.

If you have any mortgage related queries please get in touch

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

Guide: Revealed: The value of financial planning

Financial planning can add real value to your life, helping you achieve your goals and enjoy the lifestyle you want.

When you think about financial planning, you might initially focus on the financial element.

Perhaps you’re interested in how planning can help you reduce your tax bill, invest to get the most out of your savings, or make sure you’re on track for retirement?

While financial planning can certainly help in these areas, it actually goes far beyond that. It’s all about helping you live the life you want, feel more confident about the future, and reach your goals.

When clients first approach a financial professional, it’s often because they need support with a specific question or concern, such as:

Can I afford to invest more of my wealth?
How much do I need to save to enjoy my lifestyle in retirement?
What can I do to reduce Inheritance Tax for my loved ones after I’m gone?

While a planner can help you answer questions like those above, the process of financial planning is even more all-encompassing, designed to deliver greater value.

In this guide, you can find out why.

Download your copy here: “Revealed: The value of financial planning” to discover how financial planning could help you achieve your long-term aspirations.

If you have any questions or would like to discuss how we could work together to build a financial plan, please contact us.

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

Investment market update: July 2025

The US struck trade deals with several countries in July 2025, leading to markets rising and putting an end to some of the uncertainty that had plagued investors for months. Read on to find out what else may have affected your investments recently.

While it might seem like 2025 has been a poor year for investors, due to geopolitical tensions and trade wars, the figures paint a different picture.

In the first half of 2025, the FTSE 100, an index of the 100 largest companies listed on the London Stock Exchange, gained 7.2%. It’s the best performance in the first six months of the year since 2021. The data shows how markets often bounce back following short-term market movements, as the index fell sharply in April due to US tariff announcements.

Remember, while markets typically deliver returns over a long-term time frame, they cannot be guaranteed, and it’s important to invest in a way that reflects your risk profile and goals.

Trade deals lead to market rallies in July 2025

While uncertainty affected markets in July 2025, there were also several record highs.

On 3 July, it was announced that the US and Vietnam had struck a trade deal. In addition, US data showed 147,000 new jobs were created in June. The good news led to global stocks reaching a record high, according to MSCI.

US President Donald Trump previously set a deadline for trade deals. As this date approached on 7 July and countries without a deal faced high tariffs, shares on key US indices dipped slightly. The Dow Jones Industrial Average fell 0.16% and the S&P 500 was 0.3% lower.

With the trade deal deadline looming, Trump announced a pause on the levies for 14 trading partners to give countries time to negotiate with the US. It led to Asia-Pacific indices rising, including Japan’s Nikkei 225 (0.3%), South Korea’s KOSPI (1.9%), and China’s CSI 300 (0.8%).

The good news continued the following day. The FTSE 100 climbed 1.23% to close at a record high. Mining stocks led the way with Glencore, Rio Tinto, and Anglo American all up more than 3.5%.

On 14 July, European markets opened lower after Trump threatened to impose a 30% tariff on EU imports in August. The pan-European Stoxx 600 index was down 0.6%. Falls were also recorded on the main indices for Germany, France, Italy, and Spain.

There was further positive news for investors of stocks on the FTSE 100 index on 15 July. It hit 9,000 points for the first time after a rise of 0.2%. The UK was one of the few countries to have a trade deal with the US, and UK stocks benefited from trade tensions as a result.

The US and Japan reached a trade deal on 23 July. Under the deal, Japanese goods will incur a 15% tariff at the US border compared to the 25% Trump had previously threatened.

On the back of the news, Japan’s Nikkei index jumped 3.75%. Carmakers in particular saw rises, including Toyota (14.5%), Honda (10.8%), Subaru (16.8%), and Mazda (17.75%).

There was yet more trade deal news on 28 July when an agreement between the US and EU was announced. Indices across the EU were up as a result, including Germany’s DAX (0.8%), France’s CAC 40 (1%), and Spain’s IBEX (0.8%).

UK

With the Autumn Budget due in October, Reeves faces increasing pressure as key data released in July 2025 was negative.

Indeed, the Office for Budget Responsibility (OBR) said public finances are in a “relatively vulnerable position” with risks posed by tariffs, defence costs, and an ageing population. Based on current tax and spending policy, the organisation said public debt was on track to hit 270% of GDP by the 2070s. The projection would see public debt almost triple compared to the current level.

The concerns around public debt were further highlighted when UK borrowing increased to £20.7 billion in June 2025 due to interest payments rising. Worryingly, the figure was £3.5 billion more than the OBR’s forecast and could prompt the chancellor to raise taxes or cut spending.

In addition, data from the Office for National Statistics shows the UK economy shrank in May for the second month running. The 0.1% contraction was driven by a slump in industrial output.

The rate of inflation also unexpectedly increased to 3.6% in the 12 months to June 2025. It’s the third consecutive monthly increase and was the highest rate recorded since February 2024.

While the Bank of England’s Monetary Policy Committee didn’t meet to discuss interest rates in July, member Alan Taylor signalled a cut was likely in August. He said the “deteriorating” UK economy warranted a deeper interest rate cut than financial markets currently predict.

A Purchasing Managers’ Index (PMI) measures economic activity, and a reading above 50 indicates growth. In June, S&P Global’s PMI data for the UK found that the:

Manufacturing sector continued to contract with a reading of 47.7, but hit a five-month high
Construction sector was also contracting, but reached a six-month high with a reading of 48.8
Service sector posted its strongest growth in 10 months with a reading of 52.8, and improvements in order books indicate further growth in the months ahead.

So, while there are setbacks for many UK businesses, the figures suggest there’s movement in the right direction.

Europe

The eurozone hit the European Central Bank’s (ECB) 2% inflation target in the 12 months to June 2025.

Over the last 12 months, the ECB has cut its base interest rate by a quarter percentage point eight times, taking the policy rate from 4% to 2%. Despite speculation that there would be a further cut when inflation hit its target, the central bank opted to leave the rate as it was.

S&P Global’s PMI suggests the manufacturing sector across the eurozone continues to contract. However, the data indicates it may have turned a corner as the reading in June 2025 was the highest in 34 months and only just below the 50 mark at 49.5.

As the bloc’s largest economy, Germany’s exports are essential and ongoing challenges could dampen growth this year, though the new US-EU trade deal may ease some of the pressure.

A Destatis report found that German exports fell by 1.4% in May when compared to a month earlier. Exports to the US played a significant role as they were down 7.7% month-on-month and 13.8% lower than the same period in 2024.

Germany’s central bank, the Bundesbank, said the country’s exporters were losing competitiveness and called for urgent reforms to improve the business climate, including reducing barriers for skilled migrants and enhancing tax breaks for private investment.

US

Official data from the Bureau of Statistics shows that inflation increased in the 12 months to June 2025 to 2.7%. The figure is above the Federal Reserve’s 2% target.

Tariffs and uncertainty continued to leave a mark on the US’s trade deficit.

In May, the trade deficit widened by 18.7% when compared to a month earlier, according to official data. The deficit now stands at $71.5 billion (£53.5 billion) as exports dropped by 4%.

The consumer sentiment index from the University of Michigan suggests people are feeling more optimistic. The reading in July was 61.8, up from 60.7 in the previous month. It was the highest score since the trade wars began five months ago.

American chipmaker Nvidia became the first listed company to reach a valuation of $4 trillion (£3 trillion). The company announced it would build high-powered systems to train its AI software, which led to shares soaring. As of the start of July, the company’s shares have gained 22% in 2025.

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.

Does your income make you a “Henry”? Here are some ways it could affect tax considerations

High earners striving to build wealth, dubbed “Henrys” (high earner, not rich yet), may find their tax position changes drastically as their income grows. Being aware of your tax liability now and in the future could allow you to create a financial plan that helps you get more out of your money by potentially reducing your tax bill.

There isn’t a clear definition of how much you need to earn to be a Henry or what constitutes being “wealthy”. A huge range of factors could affect your financial position, from where you live in the UK to your long-term goals.

According to a February 2025 study from HSBC, people in the UK believe you need an average annual income of £213,000 to be wealthy. The figure is around six times the national average income and represents the top 4% of earners.

However, even people earning below this threshold could find they’re affected by high-earner tax rules. As a result, you may benefit from regular reviews.

If you’re a Henry, here are four tax rules that might affect your long-term finances.

1. The “60% tax trap” may affect you if your salary exceeds £100,000

A key tax implication of becoming a high earner is losing the Personal Allowance – the amount you can earn each tax year before Income Tax is due. This could mean you fall into the “60% tax trap”.

While there isn’t an official tax rate of 60% on earnings, tax rules may mean you end up paying more Income Tax than you expect. Indeed, a December 2024 report in the Financial Times suggests the number of people affected increased by 45% between 2021/22 and 2023/24.

For every £2 you earn above £100,000, you lose £1 of the Personal Allowance, which is £12,570 in 2025/26. So, once you’re earning £125,140 or more, you don’t have any Personal Allowance.

In real terms, this means for every £100 you earn between £100,000 and £125,140, you pay Income Tax of £40 and lose another £20 because of the tapering of the Personal Allowance. As a result, you’re effectively paying 60% tax on this portion of your income.

Depending on your circumstances, there are some steps you might take to beat the 60% tax trap, including:

Increasing your pension contributions
Making charitable donations from your salary
Using a salary sacrifice scheme, where you’d agree with your employer to give up a portion of your salary in return for other benefits, such as higher pension contributions or a company car.

It’s important to weigh up the pros and cons of these options, and there might be other ways to manage your Income Tax liability. Please get in touch if you have any questions.

2. Your pension Annual Allowance could fall to £10,000

The pension Annual Allowance is how much you can tax-efficiently contribute to your pension each tax year. For most people, the Annual Allowance is £60,000 in 2025/26.

However, the Annual Allowance is gradually reduced if you’re a high earner. If your threshold income is more than £200,000 or your adjusted income (your income plus the amount your employer pays into your pension) is above £260,000, you’ll normally be affected by the Tapered Annual Allowance. It reduces your Annual Allowance by £1 for every £2 your adjusted income exceeds the threshold.

The maximum reduction is £50,000. So, if your adjusted income is £360,000 or more, your Annual Allowance would be just £10,000.

As a result, it could significantly affect how you might effectively save for retirement.

3. Parents may pay the High Income Child Benefit Charge

Parents claiming Child Benefit may be subject to the High Income Child Benefit Tax Charge, if one of them earns more than £60,000 a year.

Importantly, the tax charge applies if one of the parent’s income exceeds the threshold, rather than the household income. So, if both parents worked and earned £55,000 each a year, the High Income Child Benefit Tax Charge would not be applied.

The Income Tax charge would be 1% of your Child Benefit for every £200 of income between £60,000 and £80,000. The charge will never exceed the amount of Child Benefit you receive and is usually paid through a self-assessment tax return.

While you wouldn’t receive any Child Benefit if you or your partner’s income exceeds £80,000, you may still claim it for National Insurance (NI) credit purposes. For example, if one partner is not employed because they’re caring for the child, claiming Child Benefit may mean they receive NI credits.

To receive the full State Pension, you usually need 35 years of NI credits on your record. As a result, claiming Child Benefit, even if you exceed the threshold, could be important for your or your partner’s future State Pension entitlement. While the State Pension often is enough to retire on alone, it could still play a valuable role in your long-term financial security.

4. Inheritance Tax could reduce how much you leave behind for loved ones

If you’re still building wealth, it might feel too early to think about how you’d like to pass it on to loved ones in the future. Yet, establishing an estate plan now can be valuable and evolve as your wealth changes.

In 2025/26, the nil-rate band is £325,000. If the total value of your estate is below the threshold, no Inheritance Tax (IHT) would be due when you pass away.

In addition, some estates may be able to use the residence nil-rate band if the main home is left to direct descendants, such as your children or grandchildren. In 2025/26, this is £175,000. However, the residence nil-rate band is reduced by £1 for every £2 that the estate exceeds £2 million.

You can pass unused allowances to your spouse or civil partner, so an estate may be worth up to £1 million before IHT is due. Yet, the threshold for paying IHT could be significantly lower if you’re not estate planning with a partner or the estate isn’t eligible for the residence nil-rate band.

With a standard tax rate of 40% applied to the portion of the estate that exceeds the threshold, your loved ones could face a hefty bill.

The good news is that there are often steps you can take to reduce a potential IHT bill if you’re proactive. So, if you’re a Henry, making estate planning part of your tax considerations now could be useful in the long run and enable you to pass on more to your loved ones.

Contact us to talk about your tax liability

Reducing your tax liability now could mean you have more opportunities to invest or build long-term wealth, as well as potentially pass more on to your loved ones. If you’d like to create a tailored financial plan that considers your tax position, please get in touch.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

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.

The Financial Conduct Authority does not regulate estate planning or tax planning.

The decumulation dilemmas you might need to overcome when you retire

One of the retirement challenges many people face is how to handle wealth decumulation. During your working life, you’re typically working to increase your wealth, and this usually shifts as you enter retirement.

So, if you’re retired or are nearing the milestone, read on to find out more about decumulation dilemmas and how you might manage them.

Changing your mindset may be the first decumulation dilemma

You might expect retirement challenges to focus on your money. Yet, one of the first obstacles to overcome is often your mindset.

After decades of saving money or contributing to your pension, it can feel strange to start depleting your assets, even when you’ve built them up to fund retirement.

For some retirees struggling to change how they view their assets, they might spend retirement worrying about their finances, even though they’re secure. Alternatively, they might unnecessarily cut back and miss out on experiences they’ve been looking forward to.

Having a clear financial plan could give you the confidence to use your assets to enjoy retirement.

You may be responsible for ensuring your pension and other assets last your lifetime

Many people choose to take a flexible income from their pension to fund their retirement. While this gives you more freedom, you also need to consider how long the money needs to last. If you don’t, there’s a risk you could spend too much too soon.

It’s a common fear among modern retirees. Indeed, according to a January 2025 article in IFA Magazine, half of people over the age of 55, the equivalent of 10.5 million people, worry their retirement savings won’t last their lifetime. Just 27% said they were confident they wouldn’t run out of money.

It’s easy to see why it’s a concern for so many retirees. Your pension and other assets you use to fund retirement typically need to last for decades.

February 2025 Office for National Statistics data suggests a 65-year-old woman has an average life expectancy of 88, and a 1 in 10 chance of celebrating their 98th birthday. A 65-year-old man has an average life expectancy of 85, and a 1 in 10 chance of reaching 96.

So, to be certain you won’t run out of money, most retirees need to consider how to create an income for more than 30 years.

As part of your financial plan, a cashflow model can be valuable when you want to understand how to use your wealth in retirement. A cashflow model will show you how the value of your assets will change depending on certain assumptions, such as potential investment returns and the decisions you make.

You might use a cashflow model to answer questions like:

Do I have enough to retire five years earlier than planned?
Could I afford to increase my retirement income by £10,000 a year?
What would happen if I faced an unexpected expense and needed to withdraw a lump sum?

So, it could help you understand if you have “enough” and if you might run out of money during your lifetime.

It’s important to note that the outcome of a cashflow model cannot be guaranteed, and regular reviews are essential. However, it can be a valuable indicator of whether your plan may provide financial security throughout your life or if you could benefit from making adjustments.

Inflation could affect your income needs during retirement

Your income needs during retirement are unlikely to remain static. As well as your lifestyle plans, you might benefit from understanding how inflation could affect you.

The Bank of England’s (BoE) inflation calculator highlights the effect rising prices could have on your income needs throughout retirement.

Imagine you retired in 2014 and calculated that you needed your pension to provide an annual income of £25,000. A decade later, your income will need to have increased to more than £33,000 simply to maintain your spending power.

So, if you hadn’t considered inflation when reviewing your pension, you could unexpectedly find your income falls short in your later years or that you run out of money sooner than expected.

With retirements often spanning several decades, even a seemingly low rate of inflation could add up.

As a result, making inflation part of your retirement plan is often an important part of ensuring you’re depleting assets at a sustainable rate. Again, a cashflow model could be useful for understanding the effect of inflation on your income.

A retirement plan could help you manage decumulation effectively

There isn’t a one-size-fits-all solution when managing your retirement finances. Instead, a long-term tailored financial plan could help you manage decumulation and other retirement challenges in a way that reflects your priorities and situation.

Please get in touch if you’d like to arrange a meeting to talk about your retirement.

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.

The Financial Conduct Authority does not regulate cashflow modelling.

Planning for care: Making later-life support part of your financial plan

While many people don’t rely on care later in life, planning for the potential cost of it could help you feel confident about the future and mean you have more options should you need support.

According to a December 2021 report from The Health Foundation, people are increasingly living healthier and more independent lives in their later years. Indeed, the proportion of older people who need social care has fallen.

However, as life expectancy has improved, the number of people who will need some form of care is likely to rise. The report suggests that between 2021 and 2046, the number of people aged over 85 in the UK will double to 2.6 million.

So, while needing care might not be certain, it’s important to plan for it. Last month, you read about some of the reasons why you might consider care now. Read on to discover how you may make it part of your wider financial plan.

Calculating a potential care bill

It can be difficult to calculate how much care services could cost. After all, it’s impossible to know what’s around the corner. Setting out your preferences and doing some research could be valuable.

To start, you might consider different scenarios to understand how you’d feel about the options. For example, you may answer questions like:

If you’d benefit from nursing care, would you prefer to receive this in your own home or a care home?
If you moved to a retirement village or care home, are there facilities you’d like to be near or have on-site?
Could your family or other loved ones provide support if you lived independently, or would you be able to move in with them?

With your preferences set out, you can start to calculate how much the different options may cost. The cost of care varies significantly across the UK, so doing some research in your local area alongside reviewing average figures could be beneficial.

Don’t forget you’ll need to consider how the cost of care is likely to change over the long term due to the effects of inflation.

When planning for care, it’s also important to consider a range of scenarios. If you only expect to get by with minimal support that your family could provide, you could find yourself in a difficult situation if your needs are more complex.

Being thorough when creating a care plan may mean you have more options should you need care and, hopefully, reduce financial worries at a time that might already be difficult.

4 ways you could cover care costs

There are many ways you might cover the cost of care. Here are four of the main options you could incorporate into your long-term financial plan.

1. Ringfence a portion of your wealth

Perhaps the simplest option is to ringfence a portion of your wealth for care costs. For example, you might earmark a portion of your savings or investments for care should it be needed.

2. Create a regular income

Another option is to create a regular income that would be enough to cover care costs.

You might do this by purchasing an annuity with your pension, which would then pay an income for the rest of your life. Alternatively, you might adjust your investment portfolio to create an income stream.

Your financial planner could help you assess how to create an income that offers reassurance about the future if you need care.

3. Take out long-term care insurance

It’s also possible to take out insurance that will pay a regular income if you need long-term care. The income may be paid directly to your care provider.

If you’re considering this option, it’s important that you understand the terms and conditions before taking out insurance. For instance:

What is the maximum monthly income it would pay out?
Are there any restrictions on which care providers you can use?
Under what circumstances would you be eligible to make a claim?

You may need to pay regular premiums to maintain the cover, which will vary depending on a range of factors, including your health and lifestyle. In some cases, you might make a one-off payment instead.

4. Use your property

Your home might be one of the largest assets you own. According to the Halifax House Price Index in June 2025, the average home in the UK was worth almost £300,000. So, if you’re thinking about how to fund a potentially large care bill, don’t overlook property.

There are several ways you might use property wealth to fund care.

If you’re moving into a care home, you might choose to sell your property to cover the cost.

Alternatively, you may use equity release to access some of the money tied up in your property without selling it. This could be a useful option if you want to remain living in your home.

However, there are drawbacks to consider before choosing equity release. The most common type of equity release is known as a “lifetime mortgage” and involves taking out a loan against your home.

With a lifetime mortgage, you don’t have to make any repayments, and the interest is rolled up. Instead, the loan is repaid when you pass away or move into long-term care. As a result, the amount owed could be significantly higher than the amount you initially borrowed and could affect the inheritance you leave for loved ones.

Seeking tailored advice could help you understand whether equity release is right for you.

Contact us to discuss your care plan

If you’d like to review your existing care plan or would like our support creating one, please get in touch.

Next month, read our blog to discover some of the steps you might take to ensure your wishes around care are followed.

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

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.

Equity release will reduce the value of your estate and can affect your eligibility for means-tested benefits.

A lifetime mortgage is a loan secured against your home. To understand the features and risks, ask for a personalised illustration.

The psychological influences that could affect your relationship with money

5 surprising and unconventional economic indicators

How do you judge whether an economy is sliding into a recession? Some unconventional theories suggest looking at the hemline of skirts or sales of ties could provide valuable insights due to patterns in consumer behaviour.

According to finance corporation JP Morgan, as of the end of May 2025, there was a 40% risk of a US and global recession this year. While these economists are likely to be relying on a wealth of economic indicators, from asset prices to the unemployment rate, read on to discover some surprising potential economic indicators.

1. Hemline index

The hemline index is a theory that fashionable skirt lengths rise and fall alongside stock prices.

For example, during prosperous periods in the 1920s and 1960s, skirts became shorter. In contrast, following the 1929 Wall Street crash, which led to the Great Depression, women tended to wear longer skirts.

There are several reasons why hemlines might be linked to the economy, including confident consumers being more likely to choose a shorter skirt.

Yet, it hasn’t always been accurate. The 1950s, despite being a period of economic expansion, are often associated with long, full skirts.

2. Lipstick effect

If you can’t afford to indulge in large luxury expenses or are worried about the state of the economy, you’re more likely to spend money on small luxuries, the lipstick effect hypothesis suggests.

According to this theory, during a downturn, rather than buying a designer dress, people would buy a small luxury item like a lipstick. The theory can be applied to other areas, such as choosing to treat yourself to an expensive drink or small gadget if you’re no longer feeling comfortable with more extravagant purchases.

As with the hemline index, there are times when the lipstick effect has been proven and unproven. However, what consumers choose to spend their money on could provide valuable insight into how they feel about their economic prospects.

3. Men’s underwear index

In contrast with the lipstick effect, the men’s underwear index suggests that men will cut back on spending on underwear when tightening their belts.

Indeed, according to a May 2022 report published in Business Review at Berkeley, sales of Men’s underwear in Australia fell during the 2008 recession and the Covid-19 pandemic. So, again, the personal items that people purchase could provide useful information about how they feel their finances will fare in the short term.

4. Skyscraper index

You might expect building skyscrapers to be associated with a strong economy. After all, they cost a lot to build and suggest that there’s demand for property. However, the skyscraper index could indicate that the opposite is true.

Indeed, the theory suggests that whenever a skyscraper breaks the record for the world’s tallest building, a recession will follow. This is true of the Empire State Building, which was opened in 1931 during the Great Depression, and the current tallest building, the Burj Khalifa in Dubai, broke the record in 2009 during a global recession.

When you look at the theory more closely, it’s perhaps not surprising. Skyscrapers are often conceived at the height of an economic boom, but as they can take years to complete, economies may take a turn during construction.

5. Necktie index

Ties could indicate confidence in the economy in two ways, according to the necktie index.

First, is that tie sales will increase during an economic downturn as employees want to ensure they appear professional and hard-working.

Second, the style of tie a person chooses could be influenced by their confidence. When the economy is strong, sales are likely to rise for wider and brighter ties, while slim ties and muted colours become more fashionable during a downturn.

So, next time you buy a tie, you might want to consider what your selection could say about your economic outlook.

You can be prepared for economic uncertainty

While there’s plenty of data economists can use to predict economic output, there are numerous factors that can affect it, including some that can’t be foreseen.

While it’s difficult to predict how an economy will fare, it is often possible to make this uncertainty part of your financial plan. By considering how economic ups and downs might affect your goals, you could take steps to keep them on track. Please get in touch to talk about your financial plan.

5 valuable reasons to consult a solicitor when writing your will

Writing your will should give you confidence that your assets will be distributed in line with your wishes when you pass away. Yet, for an increasing number of people, this might not be the case as they overlook the value of working with a professional.

You don’t need to use a solicitor when writing your will, but it could be useful, especially if your affairs are complex.

As well as taking a DIY approach, research published by Today’s Wills & Probate in May 2025 found that people are also turning to AI. Indeed, 47% of survey respondents said they’d feel comfortable outsourcing the writing of a will to an AI-powered system.

While writing your will yourself or using AI may seem like an easy way to complete this task, it might not be the most efficient in the long run.

Read on to discover some of the reasons why you could benefit from working with a solicitor.

1. A solicitor could spot mistakes

Even if your wishes are relatively straightforward, it can be easy to make mistakes if you write your will yourself.

Some common will mistakes include:

Not getting the will witnessed correctly
Forgetting to appoint an executor
Not addressing all assets
Ambiguous language.

Mistakes could lead to delays and, in the worst-case scenario, might invalidate your will. If your will is invalid, your estate may be distributed according to the wishes set out in a previous will or follow intestacy rules, which might not align with your plans.

2. A legal professional could highlight where potential disputes may arise

Someone contesting your will could lead to potentially lengthy and costly disputes. Depending on the outcome, it might also mean your assets don’t go to your intended beneficiaries.

Indeed, according to a Guardian article from February 2024, as many as 10,000 people in England and Wales are disputing wills every year, and the number is rising.

So, taking some time to understand if your will could be disputed and how you might mitigate it could be valuable. A solicitor could provide guidance in this area.

3. A solicitor could identify other ways to pass on wealth

A will is used to pass on assets when you pass away, but there might be other ways to distribute your wealth as well. For instance, establishing a trust could be valuable if you want to pass on assets to young children or vulnerable adults, reduce a potential Inheritance Tax (IHT) bill, or ensure wealth stays within your family.

Tailored legal advice could allow you to explore other options and understand what’s right for you.

4. A professional could make probate simpler for your family

Probate refers to the process of establishing the validity of a will, and then distributing assets in line with it. Not all estates need to go through probate. For instance, if you leave your entire estate to your spouse or civil partner and the assets are jointly owned, probate may not be necessary.

Working with a solicitor could make probate easier for your family and potentially reduce waiting times. Not only could this reduce stress at an already difficult time, but it may be particularly important if your loved ones will be reliant on your assets to cover essential outgoings.

According to a government report published in February 2025, it takes four weeks, on average, for probate applications to be granted. However, once the application has been granted, it can take months for the executor of the will to handle the estate and distribute assets.

5. A solicitor can work with your financial planner

There may be benefits to considering your financial plan when deciding how to distribute your assets. For example, you might want to use your will to reduce a potential IHT bill.

A solicitor could work with us on your behalf to ensure your wishes are reflected in both your will and long-term financial plan.

Please get in touch if you have any questions about your estate plan or writing your will.

The Financial Conduct Authority does not regulate will writing, trusts, Inheritance Tax planning, or estate planning.