As you celebrate your 30th birthday, you are entering the 2nd decade of your ‘financial life cycle’, the adult years as an earner when you may have the financial firepower to take real control of your life.
If you did not marry in your 20s, you may now feel that the time has come to marry and start a family.
You may take out a loan to help with wedding costs. Gone are the days when the bride’s family carried the full costs of the big day.
Perhaps you take your first mortgage, if you have not done so before. In the current climate you are advised to have saved at least 10% of the value of the home you desire.
Do you seek a fixed-interest or a variable rate product? Each has its advantages, depending on the investment climate at the time.
As a condition of the mortgage, a lender may require mortgage-related life cover. Do you opt for term insurance, which yields a fixed sum, or decreasing term insurance, where cover gradually reduces in step with the balance owing on your mortgage?
Separately, and with your family’s welfare in mind, you may consider writing a life insurance policy ‘in trust’. This simple arrangement has a dual benefit. Not only does it ensure quick and efficient release of funds to your family, should you die – it protects the funds from Inheritance Tax as well.
In the meantime, your family circumstances amay be changing. Remember to always review your financial products to ensure changes to your circumstances are catered for.
Critical illness insurance, for example, will pay you a lump sum in the event of incapacitation from a range of serious conditions and injuries. Your family income is secure, even if you are forced to give up work.
Income protection insurance will pay you a regular income if you are rendered ‘unable to work’ due to one ofthe circumstances listed in the policy. This is a good option if you are self-employed.
At 32, you have reached what one high street lender calls the ‘average’ age in the UK for starting to save towards your pension pot. While a good financial adviser would have already suggested you set up a pension in your twenties, now is certainly high time to do so.
There are a number of options. Do you go with your company plan, or consider a personal plan – or do you wait to be ‘auto-enrolled’ into one of the new government Personal Pension Accounts in 2012?
