Understanding what a financial plan is, can be great place to start.

What is a financial plan?

A financial plan is a document that details a person’s current financial circumstances and their short- and long-term financial goals. The plan includes ways to help achieve those goals.

By taking the time to fully understand where you are now as well as where you want to be, your adviser will prepare a personalised financial plan which aims to help you get there.

Whether you create a financial plan yourself, or choose to seek advice from an expert, a financial plan can provide reassurance that you’re on the right track.

What is included in a personal financial plan?

Depending on your personal circumstances your plan could contain different products and service recommendations to reflect your financial needs. These include:

  • Protecting you and your family through insurance products such as life insurance and assurance, critical illness cover and income protection.
  • Building an investment portfolio that suits your short-term and long-term goals.
  • Investing for your children's future.
  • Pension planning and managing your retirement income.
  • Passing on your wealth to loved ones in the most tax-efficient way.


A good financial plan  

  • Evolves with life’s changes.
  • Tracks your progress.
  • Is reviewed regularly, including any important milestones.

Why do I need a financial plan?

Financial planning can have many benefits. It helps you to consider your life goals alongside your financial situation so that you can manage your money effectively.

Understanding your financial position now could also help you plan for the unexpected in the future. Being prepared for unforeseen circumstances such as losing a job, becoming ill, or even a loved one passing away, could help to provide financial security when you need it the most.

A financial forecast could help to put you in control of your spending, cash-flow, savings, and investments with the aim to reduce stress and provide valuable peace of mind.

  • A financial plan can be a great way to lead you in helping to achieve your long-term dreams and aspirations. You probably plan so many other areas of your life, such as holidays and your career, but have you taken the time to think about your longer-term goals?

    • What will your retirement look like, and how you might fund it?
    • Or how you might pay for school or university fees?
    • Do you think about what would happen to those you care about if something happened to you tomorrow?
    • And how you might be able to manage leaving inheritance in the most tax-efficient way?
  • Now that you have set your goals, it's time to look at your current financial situation.

    Evaluating your income and expenditure is an effective way of understanding how you could make the most of your money.

    When reviewing your income remember any bonus or overtime payments you may receive, as well as your standard salary. Any pensions and other sources of revenue should also be taken into account.

    For expenditure, don't just consider your day-to-day outgoings such as your mortgage and bills, but also include your longer-term commitments, like car lease repayments or loan repayments, and money you spend on holidays, hobbies and entertainment.

    Being honest about your finances will allow you to understand if you should save and invest or improve your budgeting and spending habits.

  • Understanding your goals and financial situation will enable you to confidently complete a financial action plan. This is where you could start to turn your dreams into reality by creating an actionable plan.

    For example, you may want to review your insurance policies to make sure that you have the right protection in place should the unexpected happen.

    It can sometimes be uncomfortable to talk about money and investments with your loved ones, but having a plan in place could make things much easier for you and your family during unexpected or tough times.

  • You’ve now got a basic financial plan, which should give you more confidence to know where you’re heading and if you’re on track.

    Reviewing your plan each year will help to make sure the plan is aligned with your goals and objectives throughout your life.

    If you’d like an expert to review your plan, or if you’re struggling to take action and identify solutions, a financial adviser could help.

Important legal information

Schroders Personal Wealth is a trading name for Scottish Widows Schroder Personal Wealth Limited.