As the song says “life is a roller coaster” but it’s nice to be prepared for those legal and financial milestones that you'll meet along the way. Forward planning is vital to ensuring your financial future and enables you to have security, freedom and be prepared for those bumps in the road that you're bound to encounter.
Our guide helps you navigate through the key stages of your life and highlights some of the main areas you need think about and where to find advice.
Setting off on the right financial path with your dream career
The start of your career is an exciting time in your life and is probably the first time you’ll have any significant money in your pocket. Therefore it is good time to acquire sound financial habits that will last you a lifetime!
Negotiating your salary
You’ve just landed your first job, this is your first step to financial security and freedom. It’s important to understand your value to the business and not be too shy in negotiating your salary and benefits package. If you don’t ask, you don’t get! If you negotiate professionally, your employer is likely to appreciate your approach and see it as a useful skill.
Are the benefits benefiting you?
Benefits for employees, sometimes referred to as perks (perquisites) or fringe benefits, are any type of compensation that is not part of your salary. They tend to include things like healthcare, subsidised memberships, discounted tickets or childcare incentives. It is important when negotiating your new role that you include the most valuable and tax efficient benefits for you.
- Negotiating a better package for your new job
- Employee benefits - how to pick the right ones for you
Pensions
Retirement may seem like a long way off but it’s never too early to start your pension planning. Many employers offer a company pension after a qualifying period, or if not, it is wise to consider investing in a personal pension so that your future is secure. You should seek professional advice before choosing a pension plan.
- When and how you should start saving for a pension
- Your first pension – the options
- Pensions basics: Different UK Pension schemes
Contract of employment (things to look out for)
Like all contracts it’s important to read it before you sign. Most contracts are quite straightforward so there are some standard terms you can expect to see included such as hours or work, rates of pay, and sick pay and holiday entitlements. The contract will often refer to the employee handbook so it’s important to familiarise yourself with it and keep up to date with any policy changes.
- Employment contracts: your rights and key terms explained
- Understanding Your Employment Contract
- What are your employment law rights and what should you look out for?
Should you be clearing your student debt?
You may have just left university with a significant student debt and are continuing to accumulate further debt by paying for your first car and household items for your new accommodation. Your first reaction may be to try and pay off that debt before starting to save for other things but it may not always be the best option.
- Should I repay my student loan?
- Student loans are tough to clear – even when you've got the cash
- Why You Should Not Pay Off Your Student Loan Early
- How and when you repay your student loan (courses starting from 1998)
Saving for your future
Your immediate future may seem the only thing of interest and saving for your first ‘R’ type car or exotic holiday may be high on your list of priorities. However, there is no time like the present for exploring tax efficient ways of saving money for the longer term, such as buying your first home, whilst still enjoying the here and now.
Ensuring love and finance is a match made in heaven
Meeting the love of your life is an important milestone in your life. Understandably, finance is likely to be far from your mind when deciding to commit to each other. Nonetheless, it is important for your financial and legal security that you address some common points before you dive in to something serious and legally binding.
Pre-nuptial agreements
When in the throes of a budding relationship it is difficult not to let your heart rule your head. A pre-nuptial agreement may not be the most romantic thing to discuss but it is not just about who gets what if you split up, it can also help to sort out financial and legal issues while your relationship is sound.
- Prenups - couples can decide the financial terms of a break-up
- Prenuptial Agreements - Unromantic & Unnecessary or Good Forward Planning?
- What Are Postnuptial Agreements
- Why Every Couple Should Get A Prenup
Your legal rights – marriage, civil partnership, co-habiting
Many people who co-habit assume they have the same rights as those who are legally married or in a civil partnership, however this is an urban myth. The term 'common law' husband or wife is not legally recognised and so it is important that you understand the legal status of your relationship.
- Living together and marriage: legal differences
- Cohabitation and your cash: what are your rights
- Why a cohabitation agreement is essential for non-married couples
- Marriage & Civil Partnerships for Same-Sex Couples
Managing your money
There are many theories about the best way to manage your money as a couple whether you’re married or cohabiting. As you’d expect there are benefits to managing your money jointly - for instance to pay household bills - as well as keeping separate accounts for your individual use. It is a personal choice but we’ve given you some advice below to help decide what’s right for you.
- Marriage tax allowance: how does it work?
- Should you manage money jointly or separately?
- Why the joint bank account is a must for married couples
- Money Management Tips for Cohabiting Couples
- How couples can protect their financial interests when cohabiting
- Combining your finances: the myths
Managing your individual and joint debts
The total personal debt in the UK at the end of January 2015 was £1.469 trillion. It is a national problem that affects an awful lot of people. In a relationship it is important to understand how your joint debt and your partner's debt affects you and vice versa.
- Whose debt is it?
- How to Protect Your Credit When You Marry Into Debt
- His & Hers – debt and relationships
Life insurance
Rather like making a will, insuring your life is one of the things most of us know we should do but don't quite get round to organising. If you have a mortgage, you are likely to have mortgage life insurance but this will only cover your mortgage in the event of your death. Life insurance is there to provide for your loved ones if you die while they are still dependent on you. However, there are certain things you need to be aware of and choices for you to make; the information below should guide you through.
- 10 things you need to know about life insurance
- Life insurance pitfalls to watch out for
- Should we take out single or a joint life insurance policy?
Inheritance and making a will
Many people put off making a will and the younger you are, the less likely you are to make it a priority. Sadly, none of us know what might be round the corner so it is important to set out your wishes clearly so that your money and assets go to those you’d like to leave them to. For example, did you know that, under intestacy rules, your estate will not pass automatically to your partner if you are not married? The expression “common law spouse” isn't a legally recognised term and therefore your partner is not considered next of kin. Two thirds of people in the UK never get round to making a will.
Finding your perfect home without over stretching
Your home is likely to be the biggest investment of your life, so it’s important to get it right. Searching for your first home or looking for the next house for your move up the property ladder, imagining your family living there, is an exciting time. However, you need to have the right finance in place and understand the legal aspects of property purchases; you don't want to discover there are no building regulations for the extension you like so much!
Affordability
It’s easy when you’re house hunting to get carried away with what looks like a dream home without looking in detail at what you can afford. It's not just the mortgage costs, there are also legal fees, moving costs and the inevitable costs of property refurbishment, repairs and maintenance to take into account.
- How much can you afford to borrow for a mortgage?
- 50 House Buying Tips
- The Hidden Costs of Buying and Owning a Property
- Six things to consider before making your move in 2015
Mortgage
Mortgages, especially for first time buyers can be a minefield. It can be difficult to know who to listen to: the bank, a financial adviser or a mortgage broker, all of whom will have their own agenda. It’s vital you don’t just concentrate on the short term; for instance, could you still afford the mortgage if interest rates were to rise dramatically?
- Top 10 tips for getting a mortgage
- On the hunt for a home? The first-time buyer's guide to getting a mortgage
- The best mortgage deal - 5 ways to find it
- Managing your mortgage
Legal costs
‘Conveyancing’ is the legal transfer of property ownership. Moving home is supposed to be one of the most stressful times in a person’s life. Choosing the right conveyancer can make all the difference to the whole process, after all you want the biggest purchase of your life to go as smoothly as possible.
- How to find the right solicitor or conveyancer
- Moving Advice : Conveyancing
- Conveyancing Process (Buying)
A second property
Many of us dream of having a second home in the sun, a place to relax and unwind with family and friends and escape the rain. Or buying a second property to rent out and use as an income source. There are many benefits of doing so but it’s important to understand how to make the most of your purchase and ensure you’re using all the available tax breaks and, particularly if you are buying abroad, that your purchase is legal.
- Top Tax Tips for Second Home Buyers
- How to Buy a Second Home – 13 steps
- How to buy a second home abroad
- How are second-home owners affected by new anti-flipping rules?
- Capital Gains Tax on Property
Making a will
Making a will is the only way of making sure that your money and possessions go to the people you want them to go to. Nobody wants to think about dying but it’s one of the few certainties in life so it is wise to plan. Did you know that if you die intestate (without having made will) then the state decides who benefits?
Securing the future for your children
For most people raising a child is the most important thing they'll ever do. Everyone wants to give their children the best possible start in life and a sound financial standing is a good place to begin. Putting your legal and financial matters in order before the birth of your children is a wise move - time can be at a premium afterwards!
Legal rights and responsibilities
Parental legal rights have changed immeasurably over the last few years and will no doubt continue to change. Both mothers and fathers have rights to parental leave after the birth of a baby and are now legally entitled to share that leave if they wish to do so. All parents should be familiar with their basic rights and responsibilities.
- Your rights: maternity leave and pay
- Your rights: paternity leave
- Adoption leave and pay – rights for parents
- Surrogacy and UK law
- Guide to parental leave
- Is it legal? A parents’ guide to the law (PDF)
- Parental responsibility - what you need to know
Insurance
When you have children, it is even more important that they can be provided for if you die before they reach maturity. Life insurance can help to ensure that your family's financial needs are met.
Finance
The cost of raising a child and supporting them through university has risen to an estimated £227,266. This includes funding the early essentials such as nappies, a pram, car seat, cot and clothes as well as school fees, trips and activities later on.
You can give your child a financial leg-up by investing on their behalf. This is not only tax efficient but also helps to instil good financial habits in your children.
- Budgeting for your baby
- How to save and invest for your children
- Child trust funds explained
- How To Build A Nest Egg For Your Child's Future
- The best investments for children
Benefits and tax
The overall cost of raising a child is high. However, there are some ways of increasing your child care budget without having to earn an extra penny; these include childcare vouchers, tax credits and school schemes.
- 50+ tips 'n' tricks to save if you've got kids
- Childcare Costs Help
- New childcare vouchers: all you need to know
- The new scheme: what is Tax-Free Childcare?
Making a will
It's particularly important to make a will when you have children. Not only do they need to be financially looked after but also a will is where you can nominate a legal guardian for them. This is a difficult subject and nobody wants to think about death, particularly if they have children. However, not doing so can result in your family suffering unnecessarily while your estate is administered under intestacy rules. Making a will puts you in control of future arrangements for your children.
Legal guardians
In simple terms, a guardian is the person you would like to be responsible for your children if you and your spouse die before they are 18 and this is stated in your will. If you do not specify who you would like to look after your children, the courts will decide and it may not be the person or people you would have chosen.
Taking the financial worry out of separation and divorce
No one plans to separate or divorce but it is a sad fact of life. With approximately 40% of marriages ending in divorce it is wise to understand the legal and financial side of separation.
Mediation
Since 2014 it has became compulsory for divorcing couples to attend mediation where a neutral negotiator will work with a couple to try and find a solution that works for the whole family. This is not relationship counselling, it is designed to help a separation go smoothly rather than help a couple remain together.
Splitting assets
It's a cliché that couples who are separating argue about who has the dog, the lawn mower and the furniture while the larger joint assets are rarely discussed. If relations between the couple remain amicable they can decide on the assets without a long drawn out legal process. However, there are no rules on the division of assets in the event of divorce; if you end up in court, it is left to the judge to decide what is fair and reasonable.
- What is the financial fallout when unmarried couples break up?
- Transfers of Equity and Legal Ownership of a Property
- Protecting your home ownership rights during separation if you were cohabiting
- Who Gets the House?
Legal and financial
When emotions are running high in a separation it is sometimes difficult to see what is "fair" in terms of a settlement. On the whole people don't want things to be unpleasant, especially if there are children involved. The guidance below shows you how things are usually settled and how you can protect yourself and your future.
- Grounds for Divorce - the Complete Guide
- How to cut the costs of getting divorced
- The divorce process
Children
Negotiating residence and access rights is a sensitive process. Although in the majority of cases it is the mother who is usually awarded custody, fathers' rights are not overlooked. Ensuring that fathers have proper contact time is acknowledged as crucial to children's welfare whose well being is central to any settlement.
Plan your finances for a secure retirement
Your retirement should be something to look forward to: you’ve worked hard and raised your family and now it’s time to relax and enjoy your free time. However, for many this is not the case, as more and more people retire with debts. Planning ahead for your retirement can help to relieve financial worries.
Plan for your retirement
Many people don't start to think about retirement until it’s just around the corner. However, if you want to retire in relative comfort, then you need to start planning at least ten years beforehand and longer if you want to build up a decent pension.
- The legal tax perk that boosts your pension by up to 45 per cent
- When can I retire?
- Retirement – why should I get advice?
Paying off your mortgage
Your mortgage will be the ‘cheapest loan’ you’ll ever have in terms of the interest rate, so you need to decide if it is the right time to pay off your mortgage. The guidance below will help you make your decision.
- Should you pay off your mortgage early?
- How to pay off your mortgage early
- Pay Off Your Mortgage 7 Years Early!
Debt
It is a sad fact of life that one in five people now retire in debt. This can be a worry with no salary coming in and the future can look bleak. However, there are ways of clearing your debts so you can enjoy your retirement.
Releasing equity
Cash flow is often an issue when you first retire and you may struggle to maintain your standard of living without a salary. Equity release is one solution to boosting your income but it’s not the right decision for everyone.
- Are you considering releasing equity from your home?
- Equity release: key to unlocking your retirement – or a dangerous trap?
- Equity release explained
- Equity release just one of many perils of retirement
Pensions
A pension is the main source of income for most people who have retired and is likely to be a combination of state, company and private pensions. Since April 5, the law regarding pensions has changed giving people much more flexibility about how and when to take their pensions. Whatever you choose to do, it is important that you seek professional advice before making a decision.
- How to make 2015 the year you get the perfect pension
- Whether you're saving for old age, about to retire or already have - here's why you need to give your pension some attention in 2015
- Can I get money out of my pension early?
Tax
There are different approaches and ways you can reduce your retirement tax bill if you plan ahead.
- What tax will you really pay on taking your retirement pot
- Do you have to pay tax in retirement?
- Tax in retirement
- Allowances that can reduce your tax in retirement
Is your will up to date?
Your will is a work in progress; as your circumstances change you need to update your will so that it reflects your current status. For example, you may like to leave something to your grandchildren.
- Why you should make a will
- To protect your legacy for your nearest and dearest keeping your will up to date is vital
Power of attorney
It is sensible to decide who you would like to manage your affairs, in case you become temporarily (or permanently) incapacitated or are abroad for any length of time, before the need arises rather than afterwards. If you appoint someone you trust with power of attorney it means that you can discuss how you would like your affairs to be dealt with.
- Giving someone power of attorney
- I have a will, so why do I need a Lasting Power of Attorney?
- Guide to Power of Attorney
Inheritance tax planning
In the 2015/16 tax year, inheritance tax is payable on that portion of a person’s property and possessions worth more than £325,000 at the time of their death. The rate of 40% is applied to anything above this threshold. It is therefore paramount that you plan ahead to avoid paying more than is needed.
Making sure you budget for your lifetime care needs
Old age is inevitable and the older we get, the more likely it is that we will need some sort of care either in our own home or in a care or nursing home. Funding such care is a major concern for most people.
Who pays for your care?
It is likely that you will have to contribute towards your care needs. It’s therefore important that you understand your options and the associated costs.
- 12 ways to pay for care
- Self-funding your long-term care – your options
- Choosing care & understanding costs
- Funding your care needs
- Alzheimer's Society factsheet on paying for care
- A guide to your contribution towards the cost of residential care home and nursing home fees
Selling your home
For most people, their home is their major asset and many fear that they will have to sell it in order to fund future care. This is not always the case and there are some measures you can take to protect your home.
- Guide to property protection trust wills
- Your home, your assets and your residential care or nursing home fees
- How to pay huge care bills without selling your home
Power of attorney
Appointing a power of attorney is important so that you have some you trust in place to make important decisions for you. You do need to plan ahead because if you lose capacity and have not appointed a power of attorney, your loved ones will need to apply through the court of protection which can be a costly, drawn out process.
Grieving for the loss of a loved one without the financial worries
Losing someone you love is one of the most painful experiences of your life. You don't want to be worrying about the practical, legal or financial aspects at this time. The details below will help you to navigate your way through the period after someone dies.
Legal checklist
There are certain things you need to do when a loved one dies. Although your funeral director and solicitor can help you with these it is helpful to know what they are so you feel confident that nothing has been missed.
- What to do when someone dies
- When Someone Dies: A Practical Guide
- Practical, legal and financial matters when someone dies
The probate process
Probate allows the executors (those appointed to manage the affairs of a loved one after they have died) access to the deceased's assets including investments and bank accounts. They can then settle any debts and distribute the estate in accordance with the deceased's will, if one has been made. If there is no will in place then the deceased has died 'intestate', in which case the court will set out who should deal with their affairs and inherit their estate.
- Who can inherit if there is no will? Changes to intestacy laws
- How to manage probate process
- Wills and Probate Checklist
- A guide to contesting a will
