Changing employment can be an exciting and transformative experience, opening new doors and opportunities. However, it’s crucial to approach such transitions with a clear understanding of the financial implications involved. In this short blog post, we’ll explore five essential financial considerations you should address when changing employment.
Five Essential Financial Considerations When Changing Employment
1. What to do with my additional surplus income?
One of the immediate benefits of changing employment may be an increase in your income. Whether it’s a higher salary, bonuses, or additional perks, it’s essential to evaluate how this surplus income fits into your overall financial plan, making the correct decisions at this stage of your career can have massive impacts in both your retirement income and retirement age.
2. How to mitigate my increased tax liability?
With a change in employment often comes changes in your tax position, a higher income may push you into a new tax bracket. Understanding the tax implications of your new position is crucial for effective financial planning. If you are unsure how to maximise your tax efficiency, then consulting with a financial adviser is the best way to start.
3. What to do with my old frozen pensions?
Pensions can become dormant or frozen when you leave a company and with a culture of job hopping becoming more prevalent, the population is facing a situation where they amass multiple dormant pensions. These pensions can become increasingly difficult to manage and unclear as to whether they are performing well or even in your best interest. Pension consolidation is one of the best ways to streamline your finances and provide a clear view on future retirement.
4. How has my career change impacted my future financial goals?
Changing employment often goes hand in hand with shifts in career goals and aspirations. Take the time to reassess your financial goals in light of your new job. Whether it’s saving for a home, planning for education, or investing for retirement, adjusting your financial plan to align with your evolving goals is key.
5. Have I now got gaps in my protection arrangements?
Protection is the underpin of any good financial plan. As you transition to a new job, it’s essential to review your insurance coverage to identify and address any gaps in protection. Employer-sponsored insurance plans, such as death in service, income protection, or health insurance may have been offered by a previous employer but now may not be a part of your new benefits package. It is essential to address any shortfall that may have arisen to protect you and your family.
Conclusively
Changing employment presents a wealth of opportunities, but it also requires careful consideration of the associated financial implications. By addressing these five key financial considerations you can navigate the transition more smoothly and set yourself up for financial success in your new role. Remember, seeking guidance from financial professionals can provide valuable insights tailored to your specific situation, helping you achieve your long-term financial objectives.
Ready to take control of your financial future and make informed decisions? Our FCA-regulated team of UK-based financial advisers is here to help you navigate the complexities of the financial world. Whether you’re planning for retirement, looking to invest, or seeking expert guidance, we’ve got you covered. Reach out to us today and schedule a consultation to secure your financial well-being. Don’t wait – empower your financial journey now!
