59% of people say the pandemic has made them question their priorities. Has it affected your financial plans?


Category: Planning

Has the pandemic affected your financial plans? How can you plan for unforeseen events?

For almost two years, the Covid-19 pandemic has had a significant impact on lives around the world. From health concerns to restricting social gatherings, the pandemic may have led you to question financial plans you’ve previously set out.

People walking down a busy shopping street in London, illustrating a blog post on changing financial plans

According to a survey conducted by Aviva, almost 6 in 10 people agree that the pandemic has made them question what’s important in life. Furthermore, half have said it has changed their priorities. More than half (53%) of adults in the UK have suspended or cancelled a planned life event during the pandemic, such as buying a new home, getting married, or starting a new business.

For some, the pandemic has provided valuable time to think about what is important to them. 4 in 10 say they now feel like they can take more control of their priorities. However, the same proportion said they feel like they have less control than they did before. Setting out your priorities is crucial for building the life you want, as is putting a plan in place that will allow you to reach these goals or protect what’s important to you.

While important, it’s something many people are missing. Previous research from Aegon found that just 4 in 10 people think about what gives their life purpose and joy. Furthermore, just 13% of people have a long-term plan to reach their goals.

If the pandemic has affected your goals, setting out what you want to achieve and what is most important in your life – whether that’s supporting your family, travelling more or something entirely different – can help you take control. Thinking about the future you want is part of the financial planning process and it can help you set out key priorities that improve your overall wellbeing.

5 things you can do to plan for unforeseen events

One of the things the pandemic has demonstrated is that the unexpected does happen. Events outside of your control can derail plans. While you may not be able to prevent such occurrences, there are steps you can take to reduce their long-term effect.

The Aviva research found that 27% of people now feel less comfortable about coping with unforeseen events than they did before the pandemic. These five things can help you feel more in control.

1. Set out your priorities

Thinking about what is most important to you can help give your decisions some direction. It means you’re in a position to build a plan that puts these priorities right at the centre and that can protect your goals.

2. Create a financial safety net

The unexpected can have a significant effect on your finances. An unexpected bill can mean you need to dip into savings, while being unable to work due to illness can place strain on your day-to-day finances. Building a financial safety net can afford you more freedom, even when things out of your control happen. A rainy day fund can mean you’re able to pay for unexpected costs, like a leaky roof or car repair, without derailing other plans. Financial protection could provide you with a cash injection if you’re unable to work.

3. Consider the unexpected when creating financial plans

When you’re setting out financial plans, remember to look at different scenarios, including those that don’t go exactly according to your plan. What would happen if your investment didn’t perform as well as expected? Or how would you cope financially if you needed to take some time off work due to illness? Plotting the effect of these scenarios now means you can take steps to limit the harm they could cause.

4. Schedule regular reviews

Once you’ve taken the above steps, set out a schedule for reviews. This can mean you identify potential issues much sooner. It’s a process that can also give you confidence in the future, as you’ll know you’re on the right track or in a position to take additional steps if you discover you could fall short.

5. Work with a financial planner

As financial planners, we can help you put financial plans in place that you can have confidence in, even if the unexpected happens. We’ll help you understand potential risks and what you can do to mitigate their effect.

 

If you would like to ensure you have methods in place to weather unforeseen events, please do contact us to discuss your life goals and financial plans.

 

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

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The guidance and/or advice contained in this website is subject to the UK regulatory regime and is therefore restricted to consumers based in the UK. The FCA does not regulate tax or estate planning.