Changing energy means changes in employment for many people – what do I change financially?

The global renewable energy market was valued at $881 billion in 2020 and is predicted to reach almost $2,000 billion by 2030 according to Allied Market Research.

Here in the north-east, at least, the shift away from traditional sources of energy has seen people change jobs: some returning to employed roles from previously operating a business; and sometimes going in the opposite direction and setting up by themselves after years in employment.

Starting a new role is an ideal time to take stock of your finances, including what life, critical illness, and pension cover you have. Regularly checking in on these will help make sure your finances stay on track, whatever happens.

LIFE COVER

One major benefit we often see is death in service.

Usually expressed as a multiple of your salary, this can provide your family with some financial protection if the worst happens.

With that in mind, how much life cover do you need? What short and long-term capital requirements do any dependants have? Are there any liabilities that need to be paid if you die? Does your cover take account of your new role?

A comprehensive needs analysis will help determine the suitable amount of life cover that matches your circumstances and objectives.

INCOME PROTECTION AND CRITICAL ILLNESS COVER

Income protection and critical illness cover requirements ought to be reviewed when you change job.

What fixed monthly expenses will you need to cover if you’re unable to work, for example? Which ones can be trimmed? Does your new employer provide any cover? If so, is it enough?

If you’ve set up your own business, you ought to consider what you might need and make sure you account for any benefits you’ve lost changing role.

PENSION PLANNING

Chances are, if you change roles, you’ll need to review your pension.

Does your new employer fund a pension at the level you require to meet your longer-term objectives?

If not, adding more in the way of personal contributions or salary sacrifice is worth considering.

Starting a business will mean there’s is no access to a workplace pension, so you’ll have to fund a plan yourself. Although you’ll not benefit from any employer contributions, there are tax breaks that encourage you to contribute to a pension.

A change in role is an ideal time to review all your existing pensions from previous employment and any personal pensions you may have. Robust analysis and planning with a financial planner can be very helpful.

Potentially consolidating pots into one can make things easier to manage while improving investment efficiency and return on investment, however every case is different and requires proper advice.

ENGAGE WITH FINANCIAL PLANNER

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When changing roles, speak to a financial planner to work out what financial goals are important to you, how they can be achieved and take advantage of a regular review process.

■ Evan Duffus is a Financial Planner at Acumen Financial Planning, Aberdeen Evan.duffus@ acumenfp.com www.acumenfp.com