How To Financially Plan In Midlife - What To Consider (2024)

By Zoe Bailey, Chartered Financial Planner

After the disruption caused by the pandemic, now might be the time to re-evaluate your financial affairs if your incomings or outgoings have been altered. Major life events like starting or adding to your existing family, sending your children to school, or moving to a new home are exciting milestones but they all need careful planning. Feeling financially prepared can help you take control of your future and be in the best position to face life’s more expensive milestones.

How To Financially Plan In Midlife - What To Consider (1)

Typical milestones that need financial planning

Moving to a new house

In lockdown, potential buyers have been making the most of virtual-viewings as many will have reassessed their living space and decided to start the search for a new home to better accommodate their new home/work lives. Given the stamp duty deadline is thought to be extended for a further three months, this should further boost sales as people rush to make the most of the tax break.

That said whether you’re a first-time buyer or a seasoned home mover, there are lots of financial complexities people need to consider before they put their home on the market. For a deposit, on average, you need at least 10% of the purchase price. On top of this, you’ll also have the mortgage, mortgage product fee, valuation service, surveyor, moving costs, and legal fees to cover – all of which need careful budgeting ahead of time.

It’s a good idea to create a house moving budget and checklist so you can set aside how much you need for each step of the way earlier on in the process. It’s also worth shopping around for best quotes, researching lower cost online conveyancing lawyers instead and references for each associated cost so you get the best value.

Planning to grow your family later in life

With more and more women choosing to start (or add to) their families later in life, it’s worth considering the financial impact of this.A recent study from the ONS showed that nearly half (49%) of women born in 1989 (the most recent group of women to become 30 years old) had not started their family by their 30^th birthday. One of the biggest considerations is pension contributions.

If, for example, you fall pregnant in your early 40’s, then you will most likely have a financially dependent child closer to when you could typically be considering your own retirement plans. This can lead to significant gaps in your pension contributions, leaving with you with a much smaller pot at retirement.

Working with a financial planner who can help you map our your immediate “family finances” and what’s needed to keep you pension topped up throughout this time.

You might also want to think about how you will invest in your child’s future, which would involve setting up junior ISA – a tax-free investment account which your child can access when they turn 18 –or even beginning with small contributions into a pension for their future and when they eventually retire.

Planning for school fees

Planning for future school fee costs will be at the forefront of some of parent’s minds and the earlier you start the better. The average term fee for a senior day private school is now £5,009, or £15,027 a year, and don’t forget on top of this there are extra costs for school activities. Cashflow modelling with a financial planner can help to build a complete picture of your finances now and in the future.

They can use this information to realistically estimate your future expenditure, and if done plenty of time in advance, how much you can afford to save in the time before your child starts at school. From there, you can make investment decisions, or speak to family members about possible financial support.

Planning for a big trip abroad

While the pandemic has prevented almost all of us from being able to go on holiday, the travel ban may have provided us with an opportunity to build up savings where you would ordinarily spend it on holidays, family days out, restaurant trips, and so on. If you do have your eye on a big trip abroad in the future, it’s wise to start saving for it now so it doesn’t come as a sudden hit to your bank balance.

If you’ve travelling with somebody else, then discuss how much you’re willing to spend on the whole trip, including flights, accommodation, insurance, and expenditure, and set a goal to put aside money each month into a savings account. You’ll watch the money grow and be in a better position to splash out when the time does come to book your trip.

Making the most out of your retirement

If you’ve been planning for retirement, whether it be in a year, 5 years, 10 years, or even longer, now is a good time to book in a pensions check-up, particularly if you have had to reduce contributions due to furlough or reduced pay in recent times.

Cashflow Modelling is one way to help clarify whether you are on track with your desired retirement age and lifestyle or if you need to make changes now. These options will involve whether you can keep your preferred retirement date, have to continue working, or even if you find out that you can bring forward retirement now thanks to having a clearer overall picture of your financial situation. Speaking to a professional about this kind of financial planning is the key starting point when thinking about making the most of your retirement years.

Having all this knowledge ahead of time will really help elevate your ability to plan your time. Should you wish to spend the winter months sitting on a sunny beach, purchase a holiday home, or finally go on that safari adventure you’ve always dreamed of, putting your plans in motion today will really help you visualise those activities more clearly.

For more information on saving for life’s milestones, watch Tilney’s financial planning director talk about why planning means taking control of your future.