What are your financial resolutions for 2020?

Have you got your family protected with family protection insurances is you fall seriously ill and can't work?

NEW Year is a great time for an annual review of your financial life, and let’s face it, it’s a lot easier than going off chocolate, and a lot more comfortable than bounding around the park in your shiny new tracksuit.

Let’s look at what you could be thinking about, for a general financial healthcheck as we enter the New Year. Have you got your family protected with ‘family protection insurances’?

Life insurance, of course, is the most easily understood of these. It pays out a lump sum to your family when you die. Still, Aviva tell us that only four out of 10 families have it. Could life cover be worth thinking about this year, particularly if you have children?

The other main family protection insurance covers you, not if you die, but if you don’t. How would it affect your family if you were to fall seriously ill, and had to give up work?

Critical illness insurance or ‘CI’ insures you against being struck down by the core conditions of cancer, stroke, heart attack, tumour, and MS, as well as major heart surgery. Most policies cover much more, with an average of 34 diseases. If you are laid low by one of these conditions, the policy pays a once-off tax-free lump sum that could clear your mortgage, or cover medical costs.

We know that a quarter of men and one-fifth of women will be off long-term sick, due to a critical illness, during their working lives. You are much more likely to fall seriously ill than to die, before you retire.

So CI makes great sense, but Aviva says the number of families who’ve got it is just 12 per cent.

Oh, and by the way: CI is particularly relevant if you are self-employed, and sickness could mean your company ceases to trade. Worth thinking about?

Now let’s look at saving. I was watching a news report on homelessness during the week and the expert said ‘A lot of people are just a couple of paypackets away from being homeless.’ Legal and General aren’t so optimistic. They reckon that if you lost your job, you would on average have exhausted your reserves after just 36 days.

So ask the question: how are my cash reserves, and how long would they last me? It makes sense to think about building up a nest egg to fall back on, if an emergency strikes.

One way to do this could be an Isa. You can shelter up to £20,000 this financial year (to April) in an Isa account, where the taxman’s greedy fingers cannot touch your savings growth. Right enough, rates are not exactly thrilling at the moment, Skipton Building Society’s best instant access Isa is offering just 1.16 per cent, but there are better options if you’re prepared to put your money in for a longer time.

Before we leave the topic of savings, somebody once pointed out that if you can save an amount equal to three times your monthly wage, it gives you the freedom to walk away from any workplace where you are not happy. You will have three months to find a new job. Just a thought.

Now let’s look at your pension. Did you know that, unbeknownst to you, you are a stock market investor? If you have a pension, your pension scheme invests your life savings in investment funds and the stock market. It is the performance of those investments that will largely define the growth in your pension, and ultimately dictate your lifestyle in retirement.

Often, the funds where they have your money can be sluggish, offering only weak growth – but a financial advisor can check this for you and shift your cash into much better-performing funds. Have you been missing out on strong growth that you could otherwise have had?

It’s a worthwhile exercise. The pensions company Aon found that two-thirds (68 per cent) of today’s retirees who began planning for retirement a long time in advance say that their retirement exceeded their expectations. For those who made no plans, less than half (48 per cent) were able to say the same.

Could a New Year’s ‘tweak’ of your pension investments boost your savings growth in 2020? Again, well worth a look.

Lastly – and we’re back with protecting our family here, in a way – could 2020 be the year for you to draw up a will?

If you die with no will, you die ‘intestate’, which means the state steps in to administer your wealth according to intestacy law.

Only by making a will, keeping it up to date if your family circumstances have changed, and keeping it in a safe place, can you ensure your house and assets are administered exactly as you wanted, and in the best interests of your family, when you die.

So is 2020 going to be the year when you will get ‘money-healthy’? Happy New Year!

:: Michael Kennedy and Shaun Doherty are independent financial advisers and pensions specialists, and can be contacted on 028 71886005. Further information on Facebook at “Kennedy Independent Financial Advice Ltd” or at

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