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The importance of life planning in a changing financial landscape

by wrich

By Ian Dibb, Founder, Keylu

In the next twenty to thirty years, it’s expected that £5.5trillion will be transferred between the generations. With an estimated 73-million Baby Boomers ageing into retirement the Great Wealth Transfer will see money going to younger generations as either inheritance or gifts. With this in mind it’s more important than ever to open the conversation around life planning to prepare for the potential impacts of the Great Wealth Transfer. 

Recent reports indicate that 80 per cent of families do not have an estate planning strategy in place, with more than £4.5bn estimated to be sat inactive in dormant bank and building society accounts in the UK. 

In preparation for this uplift in intergenerational wealth, streamlining assets and having conversations with loved ones, family members and friends is crucial. 

The pandemic caused many of us to take a serious look into both our current finances and plans for the future. In the past 12 months alone, probate specialists have struggled to find all financial accounts tied to an estate in more than 25 per cent of cases.  

These statistics serve to underline the importance of increased financial planning to ensure that people are leaving their loved ones a comprehensive, easily accessible overview of their financial estate. 

Implementing estate planning, as well as life planning, is crucial to ensure that family and friends are prepared for the death of a loved one. Here, we look at some of the issues facing wealth management over the coming years and how effective life planning could help to mitigate the potential negative impact of these changes. 

The role of intergenerational wealth

Reports from FT Adviser show that around 80 per cent of UK private wealth is controlled by those currently aged between 57 and 75 years old; more commonly known as the Baby Boomer generation. This, coupled with the increase in housing wealth from the past twenty years indicates that many people are set to inherit large quantities of money from both parents and grandparents. 

In light of this changing economic market, financial planners have had to be quick to adapt their service offering and approach to intergenerational wealth.  With an astonishing £5.5trn expected to be transferred over through intergenerational wealth in the next 30 years it’s crucial for both advisors and individuals to take a more proactive approach to wealth management and life planning in general.

Changes to inheritance tax has meant more and more people are choosing to gift money while benefactors are still alive, to help absorb some of the costs and avoid hefty tax bills. However, it’s vital for people to start having open and honest conversations about their estate planning to ensure that beneficiaries are aware of their inheritance tax position and can plan accordingly. 

Similarly, inter-family disputes and allocation of assets can cause significant issues for families and friends, especially when Wills, Trusts and gifts have not been adequately communicated. 

A safe and secure online management platform could help people take the first step in life planning, allowing them to begin streamlining their assets while also talking more openly about their final wishes and plans from a financial, emotional, and spiritual position. 

I know from the personal experience of losing both my mother and sister within just two years, with limited insight into their final wishes, that having this in place can alleviate significant stress during the grieving process.  

The importance of life planning in a post-COVID world 

The past eighteen months has proven challenging for people of all walks of life, working across a variety of industries and in different financial situations. Many people have experienced unanticipated hardships, often resulting in financial disarray. Wealth management and more broadly, life planning, has always been intended to preserve and maintain financial assets, leaving behind a well-structured plan of wealth for loved ones.

Unsurprisingly, the unprecedented impact of the COVID-19 pandemic caused many people to reconsider their mortality. The uncertainty of both the present and the future caused a wave of unease and led many people to re-assess their life plans – if any were in place to begin with.

Keylu was developed in the hope of alleviating some of the stresses associated with losing a loved one, helping those left behind by streamlining assets and making them easily accessible. A Keylu account allows users to organise and secure important personal, legal, and financial documents, as well as treasured mementos in a secure online environment, making them available to the right people at the right time. 

The unpredictability of the past eighteen months has certainly highlighted the importance of wealth management and wider life planning, and the imminency of The Great Wealth transfer only reaffirms the importance of ensuring everything is in place when the inevitable happens. 

Storing financial and legal documents in a safe and secure online environment is a simple way of beginning your life management journey while ensuring that assets are easily accessible for loved ones. 

Opening up the harder conversations can be tough, but ultimately being more transparent about your financial status, as well as end-of-life requests and plans brings a host of benefits for your loved ones. 

From understanding your financial position and preparing for any potential tax implications or administration costs, to peace of mind knowing that a close friend or family member’s final wishes are being fulfilled, life planning needs to be more widely accepted, talked about and actioned to ensure a positive legacy is left behind for friends, family and loved ones.


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