Maximise your income

Cancer can affect your usual income. Planning your budget to reflect these changes will help you to cope. This means working out your outgoings and your spending priorities, and managing your existing accounts. Remember to assess your situation first.

Consider your current monthly income and expenses – and what they would be if you’re unable to work. If your income is low, you may be eligible for state benefits. This can also apply if you are elderly or a carer. If you have a health or life insurance policy, check whether you’re eligible for a pay-out. You may receive a lump-sum that you could invest or use to pay off debts.

Reviewing any savings and investments may help with their everyday management. You could decide to cash them in or stop payments if money is tight. Before cancelling any regular payments, check the terms and conditions for the savings account or investment.

Call our financial guides on 0808 808 00 00 for individual advice on planning your budget.

Planning your budget when you have cancer

After assessing your financial situation, it should be easier to plan your budget.

This means planning your income and spending, and working out what your spending priorities are. You could use our online budgeting tool. We also have more information about budgeting in our section on managing your money day to day.

Thinking about the questions below will help you work out how much money you’ll have in the coming months:

  • What is your monthly income at the moment?
  • What will your monthly income be if you’re unable to work? Remember to include any payments you would get from sick pay or from working reduced hours.
  • What are your usual expenses?
  • How will your expenses increase? You should think about the extra cancer-related costs like travel and heating costs.

Are you eligible for state benefits?

Depending on your situation, you may be eligible for state benefits if one or more of the following applies to you:

  • you have a low level of income and savings
  • you have care or mobility needs
  • you are unable to work or looking for work
  • you are elderly
  • you are caring for someone who is ill or disabled.

Our section about benefits and other financial support has more details about benefits you may be able to apply for and other financial help you may be able to get. You can also call our welfare rights advisers on 0808 808 00 00 for more information about benefits. For more information and to apply for benefits online, visit the GOV.UK website (if you live in England, Scotland or Wales) or the NI Direct website (if you live in Northern Ireland).

Macmillan helped me with claiming benefits. They got all the forms and helped me fill them in.

Alan, helped by Macmillan

Can you make a claim on an insurance policy?

If you have a health insurance or life insurance policy, your cancer diagnosis may mean you are now eligible for a payout. You may have bought an insurance policy yourself or have insurance through work. For example, many employers provide health insurance as part of a work contract.

There are two types of life insurance: term insurance and investment-linked insurance. Term insurance only pays out if you die within a set time (the term). Investment-linked life insurance pays out an agreed sum when you die, but it can also be cashed in during your lifetime, so it can be used as an investment.

You might receive a large, single payment of money from an insurance policy (a lump sum). In this case, you may want to pay it into a bank or building society easy-access account while you decide what to do with it. Easy-access accounts let you withdraw your money at any time without giving notice or paying a fee.

What you do with the money depends on your particular goals. For example, you may want to:

  • pay off a mortgage or other debts
  • buy any expensive items you need
  • pay for a holiday
  • invest the money to use as an income
  • save the money for the future.

A wide variety of investments are available. Choosing the most suitable ones will depend on your particular goals and circumstances. If you need help deciding what to do, contact a financial adviser.

Remember that insurance payouts or money from investments could affect some of the state benefits you claim.

‘My monthly pension’s less than £12, which doesn’t go far. Fortunately I had some insurance policies that I’ve been able to surrender and invest for income.’ Nigel


Do you have any savings or investments?

If you have savings or investments, you may feel it’s the right time to cash them in. Many bank and building society accounts are easy-access accounts. But with other types of savings and investments, you may:

  • have to give notice before you can take out your money
  • lose some of the profit you have made (known as the return)
  • not be able to get your money back early at all.

Providers may ignore their usual restrictions in case of illness or severe hardship.

If you have any share-based investments, you may make a loss if the stock market is low at the time you cash in. A share-based investment invests in shares or a direct holding of shares you have in a company. The value of these investments can fall as well as rise. You may have to pay surrender charges or dealing charges that reduce the amount of money you get. These are charges you pay to cash in an investment early. They apply in particular to investment-linked life insurance.

Remember that insurance payouts or money from investments could affect any state benefits you claim.

‘Money worries are the last thing you need to deal with when you are going through cancer, but they are very real.’ Elizabeth


Cash-in terms for some savings and investments

InvestmentUsual cash-in terms
Bank or building society easy-access account (both instant and no notice accounts)Money back at any time without penalty but often a lower interest rate than other savings accounts.
National Savings & Investments direct saver and investment accountsMoney back at any time without penalty.
National Savings & Investments direct individual savings accounts (ISAs or also called NISAs)

Money back at any time without penalty. ISAs can now be transferred between spouses on death without losing any benefit. [1] A cash ISA is a savings account that gives tax-free return. A stocks and shares ISA is a way of holding share-based and similar investments that gives an almost tax-free return. These are sometimes called a NISA (meaning ‘new ISA’.)

From April 2016, you can withdraw money from an ISA and not lose any ISA allowance if you put it back into the account before the end of the tax year.

Premium bondsNo restrictions. Money back within eight working days. For some products, this may be quicker if done by phone or online.
Bank or building society notice accountGive provider the required notice, for example, 30, 60 or 90 days. Alternatively, get money back immediately but lose some interest.
National Savings & Investments savings certificatesLose some interest. Money back within eight working days.
Bank or building society term accountGenerally can’t get money back early. Provider may agree to early repayment in cases of illness/severe hardship.

Investment-type life insurance

Surrender charges can be high – may be hard to replace the life cover in future. A surrender charge is a charge you pay to cash in an investment early.

Child Trust Fund or Junior ISA

The registered contact (usually a parent) can apply for permission from HMRC to withdraw some or all of the balance if a child under age 18 is terminally ill. Children born between 1 September 2002 and 2 January 2011 have an account that the government used to pay some money into (Child Trust Fund). Family and friends can add extra. A Junior ISA (JISA) is an individual savings account for a child who doesn’t have a Child Trust Fund. The government does not pay money in but friends and family can.

[1] The government plans to make ISAs more flexible. You will be able to withdraw money from an ISA and not lose any ISA allowance if you put it back into the account before the end of the tax year. Parliament need to agree this change before it becomes law.

Check the terms and conditions or contact the provider to find out:

  • the rules for cashing in investments early
  • whether exceptions are possible in case of illness.

Should you stop any regular payments into savings accounts or towards pensions or investments?

You may decide to stop any regular payments you make into savings accounts or towards savings or investments, to save money. 


If you’re putting money aside in a bank or building society account, there’s usually no problem or penalty if you stop saving. You simply stop your payments. You can either leave the savings that have already built up in the account or cash them in. A few accounts are designed for regular monthly saving over a year or so. You’ll lose some interest on these accounts if you don’t make all the payments.


You may belong to a pension scheme. If this is a scheme at work, contributions to it are usually taken directly from your pay. You can choose to opt out of the scheme but you may lose any contributions your employer is making to the scheme for you.

With some employers, you carry on building up a pension even if you’re off work sick. Check your contract of employment. Pension scheme benefits often include life insurance cover and survivor pensions, so check how these would be affected if you stop contributing. Talk to your pension provider or HR department at work.

Penalty charges

With a few investments (in particular investment-type life insurance), you agree to save a set amount each month. If you stop, there may be penalty charges that reduce the value of the money you have saved so far. Some policies include a ‘waiver of premium benefit’ that makes your payments for you if you can’t work because of illness.

Be very careful of stopping payments to an endowment policy or other investment that is intended to eventually pay off a mortgage. If there isn’t enough money to pay off the mortgage at the end of its term, you may have to sell your home. Consider whether there are other options for reducing your monthly mortgage payments.

Before you stop any regular payments, check the terms and conditions for the savings account or investment. You could also contact the provider to discuss it. Our financial guides can talk to you about your situation and give you information about stopping regular payments.

Thinking about the important issues in this section will help you work out what next steps you need to take, and whether you need further information, support or advice.

Your tax position

When choosing products and services, you often need to take into account whether or not you pay income tax (the tax you pay on your earnings if it is above your yearly tax-free allowance). In some cases, you may need to consider capital gains tax. This is a tax you pay when you sell or give something away, such as shares or property (other than your only or main home). You also need to think about the rate you pay.

This can get complicated, so it may be helpful to consider the following information:

Cash individual savings accounts (ISAs)

These are bank, building society or National Savings & Investments accounts that pay tax-free interest. You can pay in up to £15,240 each year. If you’re a taxpayer, it makes sense to use your annual cash ISA allowance before considering other savings accounts. There are also stocks and shares ISAs, which are linked to the stock market. These are sometimes called NISAs. The total combined amount you can invest in both types of ISA is £15,240.

Other savings accounts

Interest is normally paid with tax already deducted. Non-taxpayers can ask to receive interest without tax deducted. Ask your bank or building society to arrange this.

From April 2016, basic rate taxpayers will be able to have £1,000 of savings with tax-free interest each year (£500 for higher rate taxpayers). Bank and building society interest will then be paid without any tax deducted.

Pension schemes

These have a variety of tax incentives to encourage you to save for retirement. Even non-taxpayers can benefit. Most employees will automatically be enrolled into a pension scheme at work by February 2018. Your employer must then pay some contributions for you. For more information about pensions, call our financial guides on 0808 808 00 00 or see our section on pensions.

Inheritance tax

Your estate is the possessions and money you leave behind when you die, minus any debts. You should be aware that if your estate exceeds a set amount (£325,000 until 2018), then there may be inheritance tax to pay. Inheritance tax is money that can be taken from your estate after you die. There is more information on the GOV.UK website.

Make sure any life insurance and pension schemes are arranged so they pay out directly to your survivors without increasing the size of your estate. You can do this by asking for life insurance to be written in trust and by filling in an expression of wish form for these policies and for pension schemes.

Some state benefits are given to people because they have a low income and a low amount of savings.

If you claim state benefits, insurance payouts or money from investments could affect them.

We have more information about planning your estate.

Next steps

  • Make a budget of your income and expenses using our online tool.
  • Call our financial guides on 0808 808 00 00 to check if you are claiming all the benefits you can.Check your insurance policies to see if you can make a claim.
  • Check your savings and investment terms to see if you can withdraw money without penalty.
  • Contact a financial adviser for advice on your tax position.

Back to Planning your finances

Assessing your finances

Cancer can lead to extra expenses. By assessing your situation, you can plan ahead to meet your needs.

Covering your costs

If you are struggling to cover your essential costs, call us on 0808 808 00 00. You may be eligible for financial help.

Inheritance tax

Inheritance tax is paid if your estate is worth more than £325,000 after your death. This includes property, money and possessions.