This article was originally written for publication in the Jersey Evening Post Business Insights.
For generations, financial planning has quietly assumed that life comes in pairs, that people share their lives, homes and finances with a partner.
Today, life looks rather different. More people are choosing to remain single, others are marrying later in life and “grey divorce” is increasingly common. Even those who are happily partnered may one day find themselves managing finances alone due to bereavement, ill health or changing family circumstances.
This is particularly relevant here in Jersey. While more people are choosing to live independently, many others may find themselves managing their finances alone later in life due to bereavement or changing circumstances. Women, in particular, often face this reality, as they typically live longer than men and already outnumber men on the island. As a result, many will find themselves making important financial decisions independently at some stage of their lives.
The good news is that planning for one does not mean facing the future alone. In many cases, it simply means building a financial plan that can stand on its own two feet, regardless of what life ultimately has in store.
The cost of going it alone
One of the clearest differences between planning as an individual and planning as a couple is that there is often no financial fallback.
Expenses don’t recognise your relationship status. Household costs do not halve simply because only one person is paying them. A single person faces the same costs – mortgage payments, utility bills, insurance costs and other household expenses – but with only one income to support them.
This can create additional financial pressure, particularly as people approach retirement. Without a partner's pension, savings or earnings to rely upon, it becomes even more important to understand exactly what income you need and where it will come from.
The rise of "grey divorce"
Perhaps one of the biggest social changes affecting financial planning over the past two decades has been the growth of so-called "grey divorce" – the term often used to describe couples separating later in life – and while ending a marriage can bring emotional challenges, it can also have a significant financial impact.
Many retirement plans are built around a shared future, but, following divorce, assets that were expected to support two people through retirement may be divided. Pension benefits may need to be shared. Housing arrangements often change, and a single income may suddenly need to cover expenses that were previously shared.
For many people, divorce creates a need to rebuild financial plans from the ground up. Retirement goals may still be achievable, but savings, investments, protection arrangements and future spending plans often need careful review.
The sooner these conversations take place, the more options are typically available.
Protecting your future
When people hear the word “protection”, they often picture young families, school runs and insurance policies designed to safeguard a household’s income. However, protection planning is just as important for those planning independently.
In fact, one could argue it becomes even more important when there is no second income waiting in the wings. If you rely solely on your own income, what will happen if illness or injury prevented you from working for an extended period?
It is not a pleasant question to consider, but the reality is that without a partner's earnings to fall back on, a period of ill health can have a much greater financial impact. Depending on individual circumstances, income protection, critical illness cover or life insurance may help provide financial security during periods of uncertainty.
The purpose isn't to prepare for the worst in a pessimistic sense. Rather, it's about recognising that financial independence is easier to maintain when there is a safety net beneath it. Financial planning often focuses on building wealth, but protecting what you've already built is equally important.
Planning beyond retirement
For those planning independently, retirement often brings additional considerations.
“Will I have enough?” is undoubtedly a major question, but as we move into later life, another set of questions often becomes equally important. Who would help if your health deteriorated? Are your legal affairs in order? Have you considered powers of attorney and your wishes for later life? Do you have a support network around you?
Financial planning increasingly extends beyond investments and pensions to include the practical realities of ageing and maintaining independence for as long as possible.
Building financial confidence
There is no such thing as a "typical" retirement or a universally perfect financial plan, and one of the advantages of planning for one is that your decisions are entirely your own.
Understanding what you have, what you need and how to bridge any gaps can be a big confidence booster. When you understand how much you have, the income you are likely to need and how your assets work together, financial decisions feel less daunting.
In many ways, confidence can be one of the most valuable outcomes of effective financial planning.
Perhaps the most important lesson is that planning for one does not mean planning for less. With the right advice and a well-structured plan, financial independence can bring tremendous freedom and confidence.
Get in touch
To find out more about how we can help with your financial planning needs, please contact us by emailing financialplanning@titanwci.com or calling 01534 724241.
