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24 Sep 2019

Young, single and self-employed?

Why it’s particularly important to think about protecting your income if you’re young, single and self-employed.

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From barristers to hedge fund managers, if you’re a self-employed professional and not working, you’re not earning. If you’re young, talented and commitment-free, you may be OK with that. But in our opinion, you shouldn’t be. 

 

living the dream?

We see this scenario a lot at Coutts among our newly-qualified, self-employed, professional clients. Picture the scene - you’re at an incredibly exciting stage of your life. Hard work and dedication has put you firmly on your coveted career path. Your choice of profession means you’re well-paid with potential for more money later. You’re healthy and feel wealthy. And with no spouse or children, no one’s relying on your income but you.

In short, you might think you’re living the dream. So why should you think about something as ‘dull’ as protection?

 

When it’s all on the house, literally

Coutts private banker Samantha Houston works with a lot of barristers, who become self-employed when they qualify. As she explains, there are always compelling reasons to consider protecting the money you make, even at the start of your career.

“Young professionals may not have any dependents but they have other things they care about that require a steady income,” she says.

“The biggest example is bricks and mortar. I’ve seen a lot of young barristers prioritise getting on the property ladder. They’re earning good money and want to put it towards a good home as quickly as possible.

“But without the right protection underpinning their income, if they have an accident or become ill and it means they’re unable to work, they won’t be able to make their mortgage payments. Ultimately, they could be forced to leave their home.”

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“It’s straightforward to set up and really important for your peace of mind.”
Coutts private banker Samantha Houston

Think about those closest to you

Even in those thrilling, all-consuming early career days, it’s worth taking the time to think carefully about your life away from the office too.

As Sam says, “No one likes to think about dying early, but if the worst should happen, your relatives could have the added pressure of needing to sell your house quickly at a very emotional time.

“The right protection, on the other hand, could see your relatives receive the house as a ‘gift’, with the mortgage paid, taking the pressure off while actually benefitting them financially. They may well still sell it eventually, but at least the financial pressure’s off.”

 

Hope for the best but prepare for the worst

Getting the right protection in place can take just a few hours, but could lead to a lifetime of reassurance. That’s one of the reasons why Sam always talks to her clients about the importance of protection early in their financial planning discussions.

“We believe that, no matter how successful you are, it’s vital to plan for the ‘doomsday scenario’,” she says. “It’s important for you and the people you care about. It’s straightforward to set up, and really important for your peace of mind.

“This is especially true for professions like barristers, because most of them don’t get any protection benefits automatically. It’s that harsh reality of ‘no work, no income’.

“And if you don’t set up the right protection, nobody else will.”

 

How Coutts could help

Our protection professionals can put together protection solutions that are tailored to your needs. Working with our panel of underwriters, we can tailor combinations of various types of cover including:

  • life assurance
  • critical illness cover
  • income protection

Our comprehensive range of services could help ensure you’re covered. And we’ll piece it all together for your peace of mind.

To find out more, speak to your private banker or wealth manager, contact Coutts 24 on 020 7957 2424, or visit the relevant page on coutts.com.

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Key Takeaways

Young, self-employed professionals like barristers or hedge fund managers may not be giving enough thought to protecting their income.

This leaves them vulnerable to serious problems such as missed mortgage payments should they suddenly become unable to work.

Coutts could help by creating a package of protection measures tailored to their needs, covering various types of cover including life assurance, critical illness cover and income protection.