Talking ‘bout my generation? Financial tips for fortysomethings


In the third part of this series we take a look at the financial problems for fortysomethings.

Our 40’s is traditionally the period in our lives when our children are growing up and perhaps starting to think about university, we might need to move house and thoughts start to turn to planning more seriously for retirement.

So, if you are in your 40’s, read of for our top financial and money tips.

1.    Make sure you are protected

It’s highly likely that you have children, a mortgage, or both, which means you really should have sorted out your personal protection.

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If you have not protected your debt and family against the financial effects of you being ill, or worse dying early, this really should be looked at immediately.

Ask yourself, if your family lost your income how would it cope financially? The answer for most people is that it wouldn’t, if this is the case for you, then it’s time you looked at your protection.

If you have already taken our Life Cover, Critical Illness Cover or Income Replacement that’s great, but if these policies were taken out some time ago they should probably be reviewed, to ensure that the cover is as comprehensive and as cost effective as possible.

2.    Make a Will

We are constantly amazed by the number of people who haven’t made a will.

Doing so is the only way of making sure your assets are distributed in accordance with your wishes when you die; it also means you can indicated who you would like to look after your children. There are a number of consequences of not making a will, which you can read about by clicking here.

Even if you have no assets whatsoever, and few people have nothing to leave on their death, making a will is hugely important if you have children.

Making a will needn’t be costly or take up much time but it’s so important, if you do one thing after reading this article, it should be to make a will.

3.    Moving house

Many people move house in their forty’s, often because more space is needed, perhaps following a job change or just because they want to.
Until you need to move there is not much you can do in preparation, although keeping your credit rating clean, by paying debts on time, will always help when it comes to having a mortgage application accepted.

If a house move is imminent make sure you shop around for the best mortgage deal, looking at whether a fixed or variable rate product is most appropriate. Moving house also means you should review your Life Cover  and Critical Illness Cover  to make sure it fits with your new mortgage.

4.    Thinking about retirement

During your 40’s most people realise that they can’t go on forever and at some point they will want to retire, that takes planning, and even for the least well prepared person it’s never too late to start.

Think about then you want to retire and the level of income you will need, remember the children should have left home and you will have hopefully repaid your mortgage. Then get a forecast for your state pension, and get projections for your existing pensions, you now need to work on closing the gap between your existing provision and the income you would like in retirement.

The state pension probably isn’t going to be enough for you to live on; you will need to make additional provision. It’s never too late to start and there are things you can do to make it easier to close this gap, for example,  if your employer runs a work place pension then consider joining it, especially if they make contributions for you.

Remember too, retirement planning doesn’t always have to be about pensions, other forms of investing can also play their part, for example ISAs (Individual Savings Accounts) or buy to let properties, the important thing is to make your own provision, no one else is going to do it for you!

5.    Planning for university

If you have children they may well want to go to university.

We find that most parents want to help their children fund the costs of university, unhappy at the thought of them leaving with huge debts.

Unless you are a particularly high earner it’s unlikely you will be able to meet the costs of your children’s university education from income. It therefore makes sense to save or invest a monthly amount to build up a pot of money which can be used then needed.

This doesn’t need to be complicated; using an ISA (Individual Savings Account) will make the money you put aside grow more tax efficiently. If you have more than five years before you need the money and are prepared to take some risk then invest, if you have a shorter time frame, or can’t bear to see the value of your capital fall then save using fixed rate Cash ISAs  for the best interest rates.

6.    Planning for inheritances

Not an easy thing to think about, but nevertheless important.

Your parents might be getting to an age when they are thinking about their financial planning and where they would like their assets to go on their death. Perhaps more importantly they should be thinking about how they can arrange their assets to minimise any Inheritance Tax, which would be payable on their death, or indeed long term care fees whilst they are alive.

Your parents might be financially savvy and have put plans in place, if not, perhaps you should think about mentioning it to them.

Next steps

Your forties is all about reacting to events, such as a job change, or the birth of a child as well as planning for the future, especially with regard to your children and retirement.

Whilst the unexpected, in terms of an untimely death or illness, also needs to be planned for.

Our team of Independent Financial Advisers in Nottingham are experienced providing financial advice to people ength and breadth of the UK. If you are in your forties and would like advice on any of the areas discussed in this article call one of our IFAs today on 0115 933 8433, alternatively enquire online or email

Your home may be repossessed if you do not keep up repayments on your mortgage.

For providing mortgage advice we will charge an application fee of £300 and we may also be paid a fee from the lender, any fee paid by the lender will be disclosed to you. Alternatively we will charge an arrangement fee of 0.5% of the loan and refund to you any payment received by us from the lender.