3 Top Tips for Financial Resilience

Whether highlighting how reliant we are on regular income or simply by showing us how unpredictable life can be; COVID has provided a crucial advertisement for the importance of financial resilience planning. The pandemic has demonstrated how financially vulnerable we are and how easily we can be impacted by unforeseen financial shocks.

At the same time, this shared experience has provided a reminder of the need for financial resilience. The Government’s furlough scheme offered the most relatable example of how income protection cover works and consumer interest in financial resilience solutions has never been higher.

In this article, we offer three top tips to help you discover ways to become more financially resilient and able to weather future financial shocks.

Tip #1: Get your own Private Furlough Scheme

Income Protection provides a replacement income if you find yourself unable to work as a result of any injury or illness.

COVID, cancer, stress, a stroke – they stop you from working as you take the essential time to rest and recover. Income Protection could provide an essential replacement income until you’re well enough to return to work.

Think of it as your own private furlough scheme but one that you control, not the government. You can specify how much replacement income you want to receive in the event of incapacity*, how quickly you want it to kick in and how long you want it to last for.

At the end of the day, the need to earn an income is the very reason you get up and go to work each day. For this reason alone, it makes sense to ringfence it.

If you are a Locum operating via a Limited Company, then you may be able to save money and put your cover on expenses using a tax-efficient plan known as Executive Income Protection.

*up to a maximum of 80% of your annual earnings.

Tip #2: Protect your family

Unfortunately, the need for regular income doesn’t die with you. If you pass away unexpectedly, this could have an impact on your surviving family.

If you have a partner or family that relies on the income you bring to the household, then you can take steps to protect them if the worst happens.

A Family Income Benefit plan is a form of life insurance and an extremely cost-effective way of protecting your family. Rather than a lump sum, the plan provides a regular, tax-free income to ensure your surviving family remain financially resilient, even in your absence. This is essential cover for those with children or a dependent spouse.

If you are a Locum operating via a Limited Company, you may also be eligible for a Relevant Life Plan which is highly tax-efficient and enables you to put your life cover on expenses. You can learn more about this on the Plus Healthcare website.

Either way, you should always ensure that your Life Insurance policies are held in trust to avoid potential issues with inheritance tax and delays in the funds reaching your loved ones.

Tip #3: Sort your Will and Lasting Powers of Attorney

If you haven’t yet written your will, then there are many reasons to do so as soon as possible.

Writing a will enables you to decide who gets your assets, what they get and how much. It allows you to name who you want to care for your children and ensures that your assets are distributed faster and easier.

Through careful planning, you may also be able to reduce the tax liability associated with your estate, ensuring that more of your wealth reaches your intended beneficiaries.

In addition to writing a will, it’s never been more important to consider how your financial and healthcare needs would be managed if you lost mental capacity, had a stroke, suffered a serious accident or developed dementia, for example.

A Lasting Power of Attorney allows you to name those you want to manage your financial affairs and care needs should you lose capacity, before this ever becomes an issue.

Remember, it’s simply too late after the fact. Worse still, without Lasting Powers of Attorney in place, it isn’t your loved ones that would assume responsibility for your financial and medical affairs – it’s your local authority! Who wants that?

Exclusive Financial Wellbeing Offer

If you haven’t yet sorted your Will or Lasting Powers of Attorney, don’t worry, we can help. Healthcare professionals working through AppLocum can receive a 50% discount off Estate Planning Services with Plus Healthcare.

At AppLocum, your wellbeing matters to us. We hope this opportunity will offer you extra protection as you continue to do important work as a locum.

Contact us to benefit from this exclusive offer:

Phone: 0161 711 0655

Email: hello@applocum.com

About the author:

Matthew Chapman is the Senior Protection Expert at Plus Healthcare, a firm offering specialist advice and financial resilience solutions to medical professionals. In 2020, Matt was nominated for five coveted industry awards. He was also recently Highly Commended for the Best Intermediary Promotion of Protection award at the Cover Excellence Awards 2020 for his tireless efforts promoting financial resilience and the importance of Income Protection throughout the pandemic.