As UK lockdown measures are still in force, and you may find yourself with some available downtime during this period, it may be a worthwhile exercise to put your basic wealth planning “house in order” with the help of the simple checklist below. The list is not extensive and not all will be relevant to you, but anything you can do to put your house in order, as it were, must be a good thing.
Collate lost pensions arrangements
Are you aware of all your existing pension arrangements? Even from that short-term employment you took up many years ago? Any pension funds which you have accumulated in your working life could make a real difference to your overall pension savings when you reach retirement.
Research carried out by The Association of British Insurers in October 2018 estimates that there is nearly £20 billion held within 1.6 million pension pots with an average size of £13,000 which have been forgotten.
If you suspect that you have an old pension pot from a previous job, you are now able to track down the pension scheme’s contact details by using the ‘Pension Tracing Service’ which is a free government service on the following address:
In 2016 the UK Government introduced the new single-tier State Pension. Under the previous system it was difficult to understand exactly what you may have been entitled to until you reached your state retirement age, however the new system is designed to make this far simpler.
The new State Pension is based on your National Insurance record, requiring an individual to have 35 qualifying years to be eligible to receive the full amount. A qualifying year can include years where you have been in full time employment, or where an individual has received National Insurance credits given to those who have caring responsibilities (i.e. those receiving Child Benefit).
The majority of individuals are unaware of how much they may be eligible to receive as their State Pension, or at what age they will qualify for it. The link below provides further information on how much you could stand to receive and at what date it could become payable. The State Pension could form a valuable part of your retirement income, so understanding your entitlement is essential.
You only have to hear the story of Captain Tom Moore, the 100 year old war veteran who has raised an enormous amount for NHS Charities Together by setting out to walk 100 lengths of his garden before he reaches 100, to realise how many people are making charitable donations during the lockdown. You may be making donations to a charity close to your heart at this time too.
If you are a UK tax payer, when you make these donations, you are usually able to elect to apply Gift Aid to these contributions meaning the charity you are donating to receives an extra 25%, at no cost to you.
In addition, if you pay tax above the basic rate, you can claim the difference between the rate you pay and basic rate on your gross donation (i.e. the donation amount after gift aid is applied). You should therefore remember to make a note of the donations you make so that you can apply for the additional relief on completion of your self-assessment tax return.
With all this extra time on our hands, now could be a good time to go through the rather boring (and sometimes frightening) exercise of seeing what you normally spend. This may be especially important if you are currently facing a cut in pay or income as a result of the pandemic. While in lockdown you are likely to save costs on some expenses, such as parking, petrol, train fare, coffees, eating out and entertainment.
You may also have been able to put certain monthly subscriptions on hold such as gym memberships. As such, a good start point would be to review your expenditure prior to lockdown to determine how much is available in disposable income to start a new savings arrangement, make gifts out of income to a loved one or, to your chosen charity.
Log your assets
It was all very easy in the ‘old’ days. You invested in a Savings account, got a book from the Building Society and put this in the top drawer. When it was needed, everybody knew where it was. Things, of course, have changed with so much being done online, and a lot of documentation being sent on email. This can be a good thing but will also cause issues.
Let me give you an example. A client of ours recently bought some Premium Bonds. As he already had an account, he simply went online, bought the Bonds and received an email to confirm that he was to be entered in the February Prize Draw. I wished him luck with his investment, but also suggested that he logged this somewhere, so that others would be aware of them on his death. Only then did it occur to him that he had other accounts that had solely been purchased online.
Therefore, I suggest to you what I suggested to him. Set up a brief log with all your assets, including provider, policy number and whose name it is set up under. It will help your Executors enormously when managing your Estate.
In Case of Emergency (ICE) document
Do your family members know where all your important documents are held, who your wealth manager, accountant or solicitor is, and do they have their contact details? Has one member of the family historically controlled all the family finances? Now would be a good time to put all the important information into one document, including the location of your will, and anything else you think would be relevant if something were to happen to you.