Sorting out other financial issues

Cancer can have many financial effects. At one time, there may be several different issues on your mind:

  • paying mortgage, rent or debts
  • ensuring your family could cope if your illness got worse
  • writing a will
  • taking early retirement
  • getting financial advice
  • your tax position
  • making a complaint about financial services.

Our financial guides on 0808 808 00 00 can offer advice on all of these issues. If you’re struggling to cover basic expenses like food, travel and heating, call as soon as possible.

Cancer or its treatment can make managing your savings and investments difficult. You may wish to formally involve someone close to you. Consider setting up a third-party mandate or joint account.

Professional financial advisers can also give specific recommendations about products or services that are right for you. If you’re unhappy with a service you’ve already received, complain to the company directly or take your case to the free ombudsman service.

Covering essential everyday expenses

If you are struggling to cover essential expenses like food, travel and heating, call us on 0808 808 00 00 as soon as possible. Anyone in this situation should be eligible for some form of financial help, either from charities or the government.


Mortgage, rent or other housing costs

If you’re finding it difficult to pay your mortgage or rent, or if you think you might struggle with future payments, it’s important to contact your mortgage lender or landlord as soon as possible.

If you get in touch with them early and explain your situation, it’s more likely that you’ll be able to reach a solution together.

Our section about housing costs has more information. You can also call our financial guides on 0808 808 00 00 for guidance about your individual situation.


Making debt repayments

If you have debts, getting them under control should be a priority. Try to keep up with repayments as much as possible. If this becomes difficult because your income drops or you have extra expenses, talk to your lenders as soon as you can.

When dealing with debts, it’s important to take the following steps:

  • Contact lenders early to discuss a solution, and be honest with them. They may be willing to negotiate easier payments if you explain your situation.
  • Avoid taking on more debt.
  • Pay back the most urgent debts first. Urgent debts include mortgage or rent payments, council tax and utility bills.
  • Be careful about switching to a cheaper loan that’s secured against your home. You could lose your home if you don’t keep up the new repayments.
  • If you’ve bought anything on hire purchase (a contract where you pay back the money over time) and you’re thinking of returning it, check the terms and conditions carefully. You may have to pay extra charges.


Ensuring your family will cope

You may need to think about how your family, or anyone who depends on you financially, would cope if your illness becomes worse or if you die. If this happens, your family may be able to get government benefits and financial support from your employer, if you have one.

If you have life insurance, your family could also receive a payout from that. But it may be difficult for you to buy life insurance if you have, or have had, cancer. So if you already have a policy, it’s important to keep this cover.

Many people now automatically have a pension through their workplace. If you have one, it might include some life cover. If life insurance isn’t an option, consider building up extra savings and investments instead.


Making a will

If you don’t have a will, it’s a good idea to write one. If you already have a will, it’s important to keep it up to date. This will make sure your money is distributed as you would have wanted if you die.


Taking early retirement

Living with cancer may mean time off work both for you and anyone who is caring for you. This could disrupt your retirement saving and may mean you need to take a pension early.

Depending on your situation, you could ask your employer or pension provider if you can retire on the grounds of ill health.

This would allow you to take up to 25% of your pension fund as a tax-free lump sum.

If you have less than 12 months to live, you can retire on the grounds of serious ill health. With this option, you can usually take your whole pension fund as a tax-free lump sum.

The government is proposing that from April 2015, you will be able to take any amount of your pension savings as a lump sum once you reach the age of 55. Amounts up to 25% will be tax-free, and amounts above this will be taxed at your normal tax rate(s). The proposed changes only affect some types of pension scheme.

There are some other issues you should consider if you’re thinking about these options – call our financial guides on 0808 808 00 00 for more information.

You might want an estimate of the pension you may get from any contributions you make or have made. To do this, you can check your annual pension statement from your pension provider.

The Money Advice Service also has an online calculator you can use.

Remember that your actual pension may vary from these estimates, depending on:

  • how old you are when you access your pension
  • the financial choices you make then
  • your health at the time.

If you’ve lost the details of an old pension scheme, the Pension Tracing Service may be able to help you find the contact details.

State Pension

The State Pension is a regular payment from the UK government that most people get once they reach state pension age. To find out when you will reach State Pension age, or for an estimate of how much State Pension you will get, use the government's online state pension calculator. You can also get an estimate by calling the UK government’s Future Pension Centre on 0845 3000 168.


Getting financial advice

Depending on the financial issues you need advice about, it may be best to speak to one of the following:

  • Macmillan’s financial guidance service, or another charity or organisation that can help. Use our organisations search to look for other organisations.
  • The company that sold you a service or product (if you want advice about that particular service or product).
  • A professional financial adviser.

Professional financial advice is based on your personal needs and circumstances. Financial advisers (who you would have to pay for) can discuss your situation and give you specific recommendations about products or services that might be right for you. They must be authorised by the Financial Conduct Authority. If you want to find a financial adviser, ask family or friends if they can recommend someone. Alternatively, you can visit unbiased.co.uk, financialplanning.org.uk/wayfinder or findanadviser.org to search for financial advisers near you.

There are two main types of professional financial adviser. Some are independent financial advisers (IFAs). This means they consider all possible products as well as all the providers on the market that could suit your needs. Others are restricted financial advisers. This means they specialise in certain types of product (but they may still look at all the providers on the market), or they only recommend products from particular companies or groups of companies. Which type will be best for you depends on the range of services or products you want to consider.


Buying financial products and services

Saving for the future often involves buying financial products and services. Choosing suitable ones means matching the products and services to your personal circumstances – in particular:

  • the amount of risk you can cope with
  • what you can afford
  • your tax and benefit position
  • timescales
  • your health and the health of your family
  • your views (for example, ethical or religious beliefs).

It’s essential that you understand what you’re buying, and that you read the whole product document, including any small print. The main features of many products are explained in a booklet or section called key facts.

You may feel confident working through all these steps yourself. If not, you can get help with some or all of them by contacting a financial adviser.


Your tax position

When choosing products and services, you often need to take into account whether or not you pay income tax (and, in some cases, capital gains tax). You also need to think about the rate you pay.

This can be 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 several thousand pounds each year. If you’re a taxpayer, it makes sense to use your annual cash ISA allowance before considering other savings accounts. The annual cash ISA allowance is £5,940 until 30 June 2014, rising to £15,000 from 1 July 2014.

There are also stocks and shares ISAs, which are linked to the stock market. The total amount you can invest in both types of ISA is £11,880 until 30 June 2014, rising to £15,000 from 1 July 2014.

Other savings accounts

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

Pension schemes

These have a range of tax incentives to encourage you to save for retirement. Even non-taxpayers can benefit. Between October 2012–February 2018, most employees will automatically be enrolled into a pension scheme at work, and the employer must then pay some contributions for you. For more information about pensions, call our financial guides on 0808 808 00 00.

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. 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. Our section about sorting out your affairs has more information about planning your estate.

Some state benefits are given to people because they have a low income and a low amount of savings. If you claim benefits like these, remember that insurance payouts or money from investments could affect them.


Making a complaint about financial services

If you have a complaint about a financial product or service, first complain to the company that sold it to you. If you’re not happy with the company’s response, say that you want to use its formal complaints procedure.

The company should give you its final response within eight weeks. If you’re unhappy with the company’s decision or it has not got back to you within that time, you can take your case to the free, independent Financial Ombudsman Service.

The Ombudsman can order the company to put matters right, which could include paying you compensation.

As an alternative to using the Ombudsman, or if you’re unhappy with the Ombudsman’s decision, you can take your case to court. But this could be an expensive and long process.

If a financial company goes out of business owing you money, you may be able to get compensation from the Financial Services Compensation Scheme.


Help managing your money

If cancer or its treatment is making it difficult for you to look after your savings and investments, or if you think this might happen in the future, you may want to arrange for someone close to you to be involved in managing them. This would need to be someone you trust, and you would need to make it a formal arrangement.

You should not give anyone else your personal identification numbers (pins) or passwords. By giving away these details, you’re breaking your provider’s rules. If money goes missing from your account, they could refuse to refund it.

If you want someone to be able to access your savings and investments, make the arrangement more formal. For example, you could set up a third-party mandate or joint account. When you set up a third-party mandate or joint account, the person helping you can have their own card and pin.

Many savings accounts and some other savings and investments (but not ISAs) can be held jointly with someone else, such as a partner.

Transferring savings or investments into joint names means the other person becomes joint owner, can make withdrawals and other decisions, and automatically inherits the whole investment if you die.

There are ways that other people can be given legal power to manage your affairs for you.


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.

Planning your budget

Reviewing your savings, investments and income will help you plan your budget.

Managing your money day-to-day

Read about how to manage your everyday money, bills and bank accounts.

Planning and understanding your pension

If you’re affected by cancer, you may be able to draw from your pension early.