Financial Hot Topics Affecting Doctors
Ajay Naik, one of the UK's most highly regarded medical-specialist financial advisors, gives some insights to SimplyCPD re. the big issues facing doctors at the moment, and will be hosting a free online session for SimplyCPD doctors on 20th May.
What in brief do you think are the financial hot topics at the moment for doctors?
1) NHS Pensions: The McCloud Judgement will affect most doctors, with both positive and negative ramifications depending on your situation. Also, the government committed to covering the annual allowance tax charge for 19/20, as long as you elect for Scheme Pays. The deadline is this July!
2) There’ve been some big shifts in the investment markets in the last two months, so ensuring your portfolios are suitably positioned is vital.
3) Finally, new tax year, new planning opportunities – it’s certainly time to think about how to reduce your tax bills.
There are many financial advisers that doctors know - what's different about you?
Without realising, most doctors work with restricted advisers, who are typically limited to selling their firm’s own products. Fairstone is different because we’re fully independent; we’re not tied to any institution or provider, so our solutions are always completely bespoke and tailored to the individual’s circumstances. Managing £10bn of client funds and arranging £1.5bn of lending each year gives us incredible leverage in the market, to help ensure highly competitive, tailored and most cost-effective outcomes on an ongoing basis.
I’m certainly a specialist in securing the financial wellbeing of doctors, having worked closely with, and advised them for the last 20 years! My specialism isn’t just about having strong knowledge of NHS pensions, but having a deep understanding of what doctors go through during their lives (working and retired), looking holistically, planning for the long term, whilst incorporating tax planning, wealth creation and risk management.
If you could give any top tips for financial planning for doctors what would they be?
In my experience, the NHS pension alone is unlikely to meet your retirement income needs (especially if you plan to retire when you want to, rather when the government dictates!), so it’s essential to build up additional pots.
It’s never too early to start planning! Managing risks, mitigating tax, and making your money work harder, even if starting small, are key to long-term wealth creation, and once you’ve accumulated your wealth, you’ll need to make it last your lifetime and pass down the generations tax efficiently.
In what ways will the financial landscape change in the coming years?
The budgetary black hole is only going to get bigger over time, so expect further changes to the NHS pension!
Some trends I’m observing are digitisation of healthcare and increased privatisation bringing changes in primary care and the agenda against self-employed GP partners. More so than ever, a doctor’s financial planning requires regular reviews and the ability to adapt as the landscape changes.
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