2 unique circumstances that could affect your investment outlook, and why they matter

In today’s economic landscape, investing may form an essential part of your overall financial plan.

Indeed, the cost of living crisis has highlighted the importance of long-term investing for many people who previously avoided it altogether.

Importantly, with inflation reaching 6.8% in the year to July 2023, according to the Office for National Statistics (ONS), the spending power of your cash savings could be depleting rapidly.

In fact, finder reports that between May 2013 and May 2023, the average UK savings account lost £4,000 in real-terms value.

Alternatively, investing could help prevent this erosion by steadily growing your wealth over a period of many years.

Build a portfolio that suits your specific life circumstances, and your wealth could keep pace with inflation, giving you financial peace of mind. Take a one-size-fits-all approach, though, and your investments may fall short of your expectations in the years to come.

Sadly, many forms of investment advice conform to the latter: a one-size-fits-all model. These fixed strategies might assume certain factors about your life, such as that:

• You are married
• You have children.

If you don’t fit this mould, generalised investment strategies are not as likely to help you push your wealth to its potential.

So, here is how the above circumstances could affect your investment outlook, and how we can help you create a bespoke portfolio that suits you.

1. You don’t have children

If you search for advice about investing for the future or planning your retirement, you’re almost certain to find advice tailored to those who want to put money away for their children and grandchildren.

For those who do not have children of their own, this advice could be useless at best and alienating at worst.

For instance, if a couple with four children approached a financial planner to form an investment strategy, they would usually be asked about their desired time frame and attitude to risk.

It is likely that this couple might wish to prioritise their children’s milestones later on – like buying their first home – and may allow this to inform their investment choices.

On the other hand, if a child-free couple visited a financial planner for a similar reason, their investment outlook may be different. They could have longer-term investments in mind – designed to help pay for later-life care, for instance – or may be more willing to undertake a higher-risk strategy.

Plus, as you approach retirement, your later-life plans may vastly differ from those who have children.

You could be looking to prioritise travel, volunteering, or spending time with your wider family in retirement, as opposed to others who could wish to undertake care responsibilities for grandchildren, for example. All this would require undertaking a unique investment strategy now that may be able to fund your goals later on.

This is where the value of financial planning truly comes into play. By seeking personalised advice, you can build an investment plan that is designed around your life.

2. You are single, recently divorced, or widowed

If you’re investing solo – whether you are single, divorced, or widowed – your strategy and priorities might be different to those of a long-term couple.

Firstly, if you are a single parent, a secure investment strategy could come at the top of your priority list. Or, if you are single and have no children, you may have alternative future plans to those living within an immediate family unit.

Similarly, a divorced individual might be in the process of separating their investments from those of their spouse. With this transition may come new priorities and an adjusted attitude to risk.

For example, if you are now solely responsible for the mortgage repayments you used to share, you may be investing less overall and have a lower risk tolerance.

Women, in particular, can be put at financial risk by divorce. Many women pay what Legal & General call the “motherhood penalty” in divorce proceedings, meaning they may walk away with meagre pension savings compared to their ex-spouse.

The same report found that men typically retire with triple the pension wealth of a woman – so if you’re a single woman, financial advice can help you invest your wealth smartly in preparation for retirement.

In addition, widowed individuals could be particularly vulnerable to taking on a “one size fits all” investment plan that doesn’t suit them. If your spouse took care of most of your financial endeavours before they passed away, it could be easy to panic, and either refuse to invest altogether or make ill-informed decisions.

So, it’s important to work with a financial planner who can explain:

• The time frame and risk level of the investments you plan to make
• What protection, if appropriate, you need to keep your finances secure
• The opportunities a windfall from their estate could provide
• The affordability of your future plans.

No matter your situation, the sad truth is that many systems work under the assumption that a partner is involved. So, if you are single, taking independent expert advice can make all the difference.

We can help you build an investment portfolio that suits your needs.

Get in touch to start building an investment portfolio that suits your goals

Here at Prosser Knowles, we reject rigid models of financial planning. Work with us, and you’ll benefit from independent advice that is tailored specifically to your circumstances.

To get started, email enquiries@prosserknowles.co.uk or request a callback from one of our advisers.

Please note

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.

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. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.