During or immediately following a separation, dealing with finances may feel incredibly overwhelming at what is already a very difficult time.  All of a sudden you are faced with different circumstances, potentially a reduced income/access to the family pot which may have been available if pooling of resources had previously taken place and you may also be faced with having to sell your home and buy another in a different location or downsize, etc.

Have you ever heard of a financial planner?  Have you ever wondered why it may be useful to work with one from an initial stage?  What are the important financial actions to take following a separation?  How can you check on whether your financial needs may be met?  We spoke with financial planner, Daniel Gornall of Centurion Chartered Financial Planners for his top tips on the steps you can take to get your finances in order following a separation.

Understand your financial situation and develop a post separation budget

Understanding your financial situation can help you feel a little more in control and can help you develop a plan for your future.  When you are in the early stages of separation it may feel like the last thing you want to do but it is important to have clarity on your assets, debts, income, expenses and how all of these impact upon your financial future.

A specialist financial planner will work with you do to this and to ensure no stone is left unturned.  Similarly, a financial planner can help you to develop a budget for post separation life.  Focus will also be given to reviewing how much you can now afford to spend and save each month and how you can allocate resources to meet your needs.

Avoid financial mistakes

 Separating can be a very emotionally challenging time which is why it can be helpful to ensure you have the right team in place to support you.  It may be easy to make a decision which is not necessarily in your best interests.  For instance, you may agree to a lower lump sum with regard to your share of the equity in a property if your former partner is buying you out of the family home because you just want an end to disputes and painful negotiations.  Alternatively, you may decide to remain in the family home without having fully explored whether you can realistically afford to cover all of the future payments.  This is not necessarily going to be in your best interests in the longer term. 

Practical top tips

Daniel explains that it can be helpful to check your credit report to ensure that any action your former partner’s actions have taken do not impact your credit score.  Further practical top tips:

• Take steps to close joint accounts;
• Review your budget;
• Seek financial advice;
• Update your Will and your beneficiaries. Both of these can drop off the “to-do” list but action should be taken.  Often people forget to review and update their Will or fail to prioritise this following a separation when funds may be running low.  Also, it is important to update the beneficiaries of any life insurance policies, pension plans, etc.

Your future needs

It is important to make a list of your needs for housing, education, retirement and other expenses.  A financial planner can work with you to ensure your financial needs can be met.  A financial planner can sense check the terms of a settlement agreement or assist alongside negotiations (together with your solicitor) and consider the impact of taxes.

Daniel and Centurion can also provide investment advice and provides example of how he has helped clients who want to be ethical investors and those who require regular income.

Roskilly & Mills specialise in advising unmarried couples who do not have the same rights as married couples, there is no family financial pot to be divided and no claim to a pension. In the initial stages we advise clients to pull together key documents such as market appraisals of the family home, an up to date redemption statement from the lender and if possible to find out their borrowing capacity by seeing a mortgage broker. It may also be helpful to pull together a comprehensive spreadsheet of income, outgoings, savings and investments. Taking these steps and coming to the initial meeting with this information will prove useful but we are always happy to talk to clients at whatever stage they may be at.

We work with other professionals collaboratively to support our clients. We are aware of the difficulties our clients face when going through separation and we provide a supportive and empathetic approach when advising our clients at what can be a very difficult time in their lives.

For more information about Daniel Gornall, Centurion Chartered Financial Planners – please go to: Daniel Gornall – Centurion Chartered Financial Planners