When I started work at 18, my godfather suggested that I take out a new ten-year endowment policy each year.
For younger readers, an endowment was a long-term savings policy designed to provide a lump sum after a set period. The advice was well intended. It encouraged me to save regularly and think beyond my next pay packet.
However, it was missing two important questions:
- What was I saving for?
- What would I do with the money when each policy matured?
I cannot remember how many policies I started, or how many survived the full ten years.
The lesson is not that saving was a bad idea. It is that saving without a clear purpose can be difficult to sustain. A ten-year commitment may also feel very different at 18, 25 or 30 because life rarely develops exactly as we expect.
In our first insight this month, we looked at using autumn as an opportunity for a simple financial reset. This time, we want to look ahead and consider how we can prepare financially for change.
Preparing financially for change means keeping suitable money accessible for unexpected costs, setting aside funds for known goals, protecting your household where appropriate and continuing to plan for the longer term.
Why Is Financial Resilience Important?
At 18, few of us know what the next ten years will bring. In truth, that uncertainty never completely disappears.
We may have plans, hopes and expectations, but work, family, health and the wider economy can all introduce changes that we did not anticipate.
The FCA’s Financial Lives 2024 survey, published in 2025, found that 10% of UK adults had no cash savings at all. A further 21% had less than £1,000 available to draw on in an emergency. You can read the FCA’s Financial Lives survey findings here.
This does not mean that everyone should hold large amounts of cash. Keeping too much money in cash can create other risks, including the effect of inflation over time.
However, even someone with valuable pensions, investments or property can feel financially exposed if they do not have enough money available when an unexpected cost arises.
Financial resilience is therefore about balance: having enough flexibility for today without losing sight of tomorrow.
Change Can Be Planned or Unexpected
Some financial changes are positive and can be planned for in advance:
- Buying a home
- Getting married
- Starting or growing a family
- Changing career
- Starting or selling a business
- Helping children or other family members
- Reducing working hours
- Moving into retirement
Other changes may arrive with little warning:
- Redundancy or a drop in income
- Illness or an accident
- Bereavement
- Relationship breakdown
- A major home or car repair
- An unexpected family responsibility
Even a positive change can create financial pressure. A new job may bring a higher salary, for example, but it can also lead to higher spending as our lifestyle adjusts to our new income.
The aim is not to predict everything that could happen. It is to create enough flexibility so that one change does not immediately unsettle the rest of your finances.
Think About Three Financial Time Horizons
One way to prepare is to divide your money according to when it may be needed.
These are not rigid rules or necessarily three separate financial products. They are simply three different jobs that your money may need to perform.
Short-Term Money
Your short-term pot is there for emergencies and costs that may arise over the next few years.
This might include money for:
- An unexpected household repair
- A period without employment income
- Replacing a car
- An urgent family expense
- A known holiday or home improvement
This money will normally need to be easy to access and should not depend on selling an investment at the wrong time.
A commonly used starting point is three to six months of essential household outgoings, held in accessible savings. However, the appropriate amount will depend on your circumstances.
Someone with secure employment and two household incomes may feel comfortable with a smaller reserve. A business owner, self-employed person or household relying on one variable income may prefer a larger buffer.
MoneyHelper provides further information about building emergency savings.
Medium-Term Money
Medium-term planning covers money that you may need within approximately five to ten years, although the timescale will depend on your goal.
This might include:
- A future house deposit
- School or university costs
- Helping children onto the property ladder
- A career break
- A significant family celebration
- Preparing to reduce working hours
The important questions are when the money may be needed and how much certainty you require.
If the date is fixed, you may have less capacity to accept short-term investment falls. If the timing is flexible, you may have more options. A financial planner can help you consider the appropriate balance between accessibility, risk and potential growth.
Long-Term Money
Long-term money is intended for goals that may be ten years or more into the future.
Retirement is the most obvious example, but this pot could also support later-life care, family wealth or a future legacy.
Pensions and investments can play an important role because they provide the opportunity for long-term growth. However, the right approach should reflect your goals, timescale, attitude towards risk and capacity to absorb losses.
The purpose remains more important than the product. Knowing what the money is intended to achieve makes it easier to choose an appropriate approach and remain focused when markets move.
Going Beyond Savings and Investments
Cash reserves can help with temporary financial shocks, but some changes may have a much greater and longer-lasting effect.
As our responsibilities grow, financial protection may become more important.
For example:
- Life assurance can provide money to support a family or repay debts following a death.
- Critical illness cover may provide a lump sum following the diagnosis of a specified serious illness.
- Income protection may replace part of your income if illness or injury prevents you from working.
The amount and type of cover needed can change when you buy a home, get married, have children, take on business responsibilities or move closer to retirement.
This does not mean buying every type of policy available. It means understanding what would happen financially if an income stopped or a family member died or became seriously ill.
Existing cover should also be reviewed. A policy arranged many years ago may no longer reflect your income, mortgage, family responsibilities or current needs.
How Much Preparation Is Enough?
There is no single answer.
Preparing for change does not mean trying to protect yourself against every possible event. That could leave too much money sitting in cash or result in paying for insurance that you do not need.
Instead, consider:
- How secure and predictable is your income?
- How many people depend on that income?
- How much would you need to cover essential spending?
- Which costs are likely over the next few years?
- How quickly could you access your savings?
- What financial protection do you already have?
- How would an unexpected change affect your longer-term plans?
You may decide that your current arrangements are sufficient. You may decide to build your emergency savings gradually, review your protection or redirect money towards a clearer goal.
The important point is that this becomes an active and informed decision.
Doing Nothing Is Still a Decision
We could simply say that everyone needs to prepare financially for change. In principle, that is true.
However, people can decide not to hold a large emergency fund or not to take out a particular type of protection. Doing nothing is still a decision, but it should be made with an understanding of the possible consequences.
The question is not whether you can remove uncertainty. You cannot.
The question is whether your finances give you enough flexibility to cope if life develops differently from the plan.
Building a Plan Around Your Life
At Manning Gee Investments, financial planning starts with understanding your values, responsibilities and priorities. We then bring together your cash, pensions, investments, protection and tax planning within one clear plan.
Based in Bristol and supporting clients across the UK, we work with individuals, families and business owners who typically have £100,000 or more to invest. Our role is to help you grow and protect your wealth while keeping your plan connected to the life you want.
If you are already a client and something has changed, you do not need to wait until your next annual review to speak to us.
If you are not yet a client and would like to discuss how financial planning could help you prepare for the future, please contact Manning Gee Investments to arrange an initial conversation.
In our final insight this month, we will bring these ideas together and explore why financial plans need to evolve.
General disclaimer: We sourced the data from external providers. While we strive for maximum accuracy, we cannot guarantee the reliability of the data they supply. The author writes the introduction from their perspective, reflecting their views, which may not align with those of Manning Gee Investments. Anyone considering a product or service based on this blog should seek professional advice or conduct their own research before deciding. The author bears no liability for decisions made based on this blog. Investments can rise and fall in value, and the return at the end of the investment period is not guaranteed—you may receive less than you originally invested.
Update: September 2026