30 Sep 2019 Just 23% of UK employees have made a current will, according to the Financial Wellbeing Index from Close Brothers. This means that up to 25 million UK workers may not have taken this crucial step to protect their financial health and to provide for their loved ones. This number rises to almost half (44%) of those approaching retirement (aged 55+) and is higher in men than women (26% vs 20%). Regardless of the value of your estate, a current will, and careful estate planning is the best way of ensuring that the people you want to inherit your money, property and possessions actually do, whilst paying the least amount of Inheritance Tax (IHT).
More generally, those with a current will are more positive about their finances; 65% are happy with the state of their finances as opposed to around half of those without (47%).They are also twice as likely to feel financially prepared for retirement than their counterparts without will provision (57% compared to 30%), and much more confident that they will be able to afford to retire at the age they want than those that without a will – 61% vs 37%.
Preparing for later life goes hand in hand with being prepared for emergencies. Only 9% of those with a will don’t have the savings funds to pay for an emergency, drastically fewer than the quarter (26%) of those without a will. Consequently, those with a current will are nearly twice as likely to feel financially prepared for unexpected financial costs or a significant reduction in their income than those without (59% vs 35%).
Having a will however, is not a silver bullet. Despite taking the steps to plan for after their death, almost half (44%) of those with a current will admit to not having a financial plan in place to help them achieve their financial goals while still alive. A quarter (26%) also admit that they don’t budget their finances, only one in six (16%) have purchased a critical illness protection product, and one in ten (11%) an income protection product. Concerningly, a mere 4% of employees have registered a lasting Power of Attorney, a job which is often left until it’s too late.
All of these signs explain why protection comes in as one of the lowest scoring areas of financial wellbeing across the UK; at 43 (out of 100), leaving UK employees exposed and anxious.
Jeanette Makings, Head of Financial Education at Close Brothers said: “All too often people put off writing a will or are unaware of the benefits of having one. Although not a cheery subject, a will is an essential part of financial planning, ensuring peace of mind for you and your loved ones no matter what your age or wealth level. To help us reach our financial goals, we are encouraged to plan, invest, and manage our money during our lifetime. Making a will and planning your estate is a natural extension of this. Anyone who has dealt with the estate of a family member or friend who has died without a will can confirm just how difficult, distressing, time consuming and expensive it is to get everything sorted out. Making a will can be straightforward and inexpensive and there’s nothing to be gained from putting it off. It is recommended that you seek professional advice; the laws are complex, and errors and omissions often don’t come to light until after death and can be extremely distressing, time consuming and costly to try to resolve”.
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