The Prosperous Pound

It doesn’t matter how much you prepare; sometimes unexpected life events could mean your carefully laid plans go awry. While you can’t know what’s around the corner, you can change how you respond to unpredictable events to help keep your financial plan on track.

A life event could have a huge impact on your wealth, both now and in the future. Circumstances outside of your control might even lead to you changing your long-term goals. So, even if you already have a robust financial plan in place, a review following major life events could be helpful. 

Here are four unpredictable life events you might have experienced that could mean you’d benefit from updating your financial plan. 

1. Experiencing redundancy

Redundancy could have a huge effect on both your short- and long-term finances.

In the short term, you might need to dip into savings or other assets to cover your essential outgoings.

In a historic victory, the Labour Party won a majority in the 4 July 2024 general election. After 14 years of Conservative government, you might be wondering what the change means for you and your financial plan. 

Since Keir Starmer took office, a day has barely passed without headlines speculating about the changes Labour will enact. The news can affect your emotions and spur you to make decisions that don’t align with your financial plan.

For example, after reading that some investors are already acting to “protect their pension” from Labour, you might think you need to do the same. Or suggestions that Starmer could raise revenue by increasing the standard rate of Inheritance Tax may mean you start thinking about how to pass on wealth now. 

Indeed, according to a poll from interactive investor, in the weeks before the general election, 15% of investors made changes to their portfolio, and a third considered doing so.

A survey has revealed that the majority of bank and fund managers believe that uncontrolled climate change will impact their investments in the medium term.

Read on to find out how it could affect your finances.

UN: The window for tackling climate change is closing 

In the Paris Agreement in 2015, 195 nations pledged to tackle climate change. The agreement aims to limit global warming to “well below” 2C when compared to pre-industrial levels and to “pursue efforts” to keep warming within a 1.5C limit.  

Scientists have previously warned that crossing the 2C threshold could lead to irreversible changes to ecosystems and the climate. 

However, despite the pledge, the UN warned in 2023 that the window to reach climate goals was closing. A report from the organisation said “much more needs to be done”. 

Exceeding the climate target could disrupt many communities and parts of modern life, which may affect the performance of investments.  

Most bank and fund managers say climate change will impact investments within 5 years

A survey published in FTAdviser asked bank and fund managers how they believe climate change will impact their investments.

Your relationship with money may play a huge role in how you handle financial decisions and your long-term security. Many factors affect your financial decisions, but you might be surprised by how much your childhood experiences still influence you today. 

The majority of parents recognise how important financial education is. Indeed, according to Nationwide, almost 9 in 10 parents to children aged between 8 and 13 say personal finance education would help their children better understand the value of money. 59% also agreed that personal finances were more important than maths. 

Yet, studies suggest these parents might be considering the positive effects of financial education too late.

Research: Money habits could be set by age 7

A 2013 study from Cambridge University indicated that financial habits are formed by the age of seven. The research suggests that children have often formed core behaviours by the age of seven which they will take into adulthood and could affect financial decisions for the rest of their lives.