Losing your spouse or partner can be one of life’s most difficult experiences, and on top of the emotional challenges, there are often lots of practicalities to sort out. Among the most complex of these is your finances.
Whether revisiting your budget, dealing with service providers, or understanding your entitlements, managing money after such a loss can feel overwhelming, so it’s important to seek assistance and help where you can.
While your family and loved ones may be able to offer emotional support and help with day-to-day tasks, a financial planner can help you reorganise your finances to reflect your new circumstances.
Read on to discover six steps to regain financial security after losing your partner.
1. Review your mortgage
If you held a joint mortgage with your late partner, you’ll need to inform the lender of their passing.
You may be able to pay off the remaining balance using inherited assets, but if that’s not possible, the responsibility for repayment will likely fall to you.
Even if your name was already on the mortgage agreement, you may not automatically become the sole mortgage holder, as it was brokered for two of you rather than one.
In most cases, you’ll need to apply for a new loan in your name and undergo a full financial assessment to ensure you’re able to take it on. If the lender determines you’re unable to meet repayments, you may need to sell the property.
A financial planner can work with you to consolidate any income and wealth you have to help ensure you can keep your property. If you have to sell it, they can also assist you in finding a mortgage deal that is suitable for your situation.
2. Recalculate your budget
When your partner dies, it is likely to come with a significant financial shift.
For instance, you may experience a drop in your household income if you lose your partner’s earnings. Alternatively, your income might rise due to the inheritance you receive and how you choose to manage it.
Either way, it’s important to calculate a new budget that fits your situation. Start by mapping out all sources of income, including your earnings, pension, and investment returns. Then compare this with your monthly expenses, noting which have changed and which remain fixed.
Once you have a clear picture of your income and expenditure levels, you can make adjustments to your variable outgoings as necessary to ensure you remain on track to achieve your goals.
3. Address outstanding debts and tax liabilities
In some cases, your partner’s estate may continue to generate income, such as from rental properties or investment interest, which could be taxable. They also may have left behind debts, such as credit cards or personal loans, that must be dealt with.
It’s a good idea to address these early on to ensure they don’t accrue too much interest.
Begin by compiling a clear list of all the outstanding debts and tax obligations. Determine which can be paid off immediately and which you may need to manage over time. This will allow you to adjust your budget realistically and avoid any late fees or penalties.
4. Update your insurance policies
You will need to update any insurance policies you jointly held with your partner or that they held on their own and ensure they are still valid. If you don’t inform the providers of your partner’s passing, you could be left without coverage.
Check the status of all existing policies – including home, life, and car insurance – and contact the providers to make sure you still have protection.
You may need to take out new policies in your name to remain covered.
5. Plan for your financial future
Once the immediate priorities are under control, take time to reflect on your long-term financial plans.
For example, if you’ve received a significant inheritance, you may wish to explore investment opportunities or reconsider your retirement timeline. You may also want to revisit your long-term goals and create new ones based on your situation.
It’s also a good time to review and update your will. Ensuring it reflects your current wishes can help protect your loved ones and simplify matters down the line.
6. Ask for help
It’s important to remember that you don’t have to face the loss of your partner alone. In difficult times, loved ones can be a vital source of emotional support and may be able to help with everyday tasks or practical matters.
When it comes to your finances, a financial planner can help you make sense of your new circumstances and work with you to create a plan that reflects your needs, priorities, and future goals.
Get in touch
Managing finances after losing a spouse is never easy, but with clear steps and the right guidance, you can regain control and begin building financial stability for the future.
To find out more about how a financial planner can support you after a bereavement, get in touch.
Email at info@blueskyifas.co.uk or call us on 01189 876655.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, trusts, Lasting Powers of Attorney, or will writing.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.