Can your finances cope with a sudden change in circumstance?

Imagine two people in the same situation: both mid-career professionals, both with families and mortgages.

One morning, they’re told their role is being made redundant.

The first person has no plan. Their income stops abruptly, but the outgoings don’t. The next term’s school fees are due. There’s a home extension half-finished and the family holiday already paid for.

They start dipping into savings, cancelling direct debits, wondering which expenses to cut first. Nights become sleepless, conversations tense. Financial anxiety spills into every decision.

The second person has a financial plan. They’ve already discussed contingency options with their adviser: how long their emergency fund will last, which insurance policies might help, and what changes they can make in the short term to stay on track.

They’re still worried, who wouldn’t be? But they have a plan, which means they’re in control. And that can make all the difference.

Financial planning can’t remove uncertainty, but it changes how you deal with it. It replaces panic with perspective, giving you the clarity to make good decisions when life takes an unexpected turn.

For middle-to-higher earners, sudden life changes can be particularly disruptive because there’s more complexity involved: multiple income streams, property, dependants, and longer-term goals that rely on stability.

Here are some of the most common events that can shake even the best-laid plans:

• Single-income households or career changes: Pursuing a new path or stepping back from work for family reasons can affect benefits, bonuses, and pension contributions.
• Redundancy: Even with a payout, the sudden loss of income can unsettle savings and long-term investment plans.
• Serious illness or disability: A diagnosis can mean time away from work or expensive lifestyle adjustments.
• Divorce or separation: Dividing assets, refinancing a mortgage, and running two homes can significantly alter financial goals.
• Death of a partner: A painful emotional event that often comes with complex financial consequences.
• Ageing parents needing care: Supporting parents while still helping children can stretch resources thin.
• Market or policy shocks: As seen after the 2022 mini-Budget, sudden economic events can impact mortgages, pensions, and investments overnight.
• Starting or growing a family: Even planned life changes can affect financial stability, with new costs and changing priorities to consider.

These aren’t rare ‘what ifs’, they’re part of life’s natural ebb and flow. What matters is how prepared you are to handle them.

The first few weeks after a major event can be the hardest. Financial commitments don’t pause just because your circumstances have changed. The mortgage payment still leaves your account, school fees arrive as usual, and those renovation costs continue piling up.

It’s often at this stage that even the most cautious among us can make hasty choices – perhaps cashing in investments at the wrong time, taking on unnecessary debt, or cutting contributions to pensions and ISAs that are quietly compounding for the future. The emotional weight of uncertainty, especially when combined with family stress, can cloud even the best judgement.

Having a buffer, such as three to six months of expenses in an accessible account, provides breathing space. It buys time to think clearly, seek advice, and make decisions based on strategy, not fear. Short-term income protection can also make a critical difference, bridging the gap until longer-term solutions take effect.

And sometimes, the greatest relief simply comes from knowing you’re not alone, that there’s someone objective in your corner who understands both the numbers and the emotions that come with sudden change. You might be facing it for the first time, but your financial planner will have helped many other clients through similar circumstances.

The true financial impact of a life event often unfolds slowly. A few missed pension contributions or a year out of work might not seem much at first, but over a decade, the ripple effect can be significant. Investment growth slows, savings goals shift, and retirement plans may need revisiting.

This is where cashflow modelling becomes invaluable. A financial planner can map out different ‘what if’ scenarios, from redundancy or illness to early retirement or caring responsibilities, and show you, visually, how each situation could affect your finances and life choices.

You can see, in real time, how your income, savings, and lifestyle might adapt. For many clients, that moment of seeing the numbers clearly brings real comfort. The future feels less uncertain and more like something you can plan for. And if the worst does happen, nothing needs to come as a shock.

Financial protection isn’t about expecting the worst; it’s about giving yourself and your family options when life changes course.

• Life insurance helps ensure your loved ones are financially secure if you’re no longer there to provide for them.
• Critical illness cover offers a lump sum to ease the financial strain of recovery or lifestyle changes.
• Income protection replaces a portion of your income if illness or injury prevents you from working.

Having these policies in place means that, whatever happens, you retain a degree of control. You can continue to make choices: to stay in your home, to keep children in the same school, or to focus on recovery rather than the bills.

Protection plans also need reviewing as life evolves – after marriage, a new baby, or taking on a larger mortgage. Circumstances change, your cover should too.

At its core, financial planning is about giving structure to uncertainty. It brings together all the moving parts of your financial life including your income, outgoings, investments, protection, pensions and aspirations, into a plan that can flex as life changes.

A financial planner will:

• Model ‘what if’ scenarios, helping you see how choices today affect your future.
• Build contingency and emergency funds.
• Balance short-term needs with long-term goals.
• Regularly review your plan so it adapts with your life stage.

But the numbers only tell part of the story. A good planner also understands the human side: the anxiety of making big financial decisions, the emotional weight of caring for family, and the relief of knowing someone has thought through the details for you.

Clients often describe that first planning meeting after a major life event as a turning point, not because everything was suddenly solved, but because they finally felt guided and no longer alone.

We can’t control life’s twists and turns. But we can choose how prepared we are to meet them.

Two people can experience the same crisis yet come out with very different outcomes. One scrambles to react; the other adapts calmly, knowing which steps to take. The difference isn’t luck. It’s foresight, structure, and trusted advice.

A good financial plan won’t stop life from changing. What it will do is give you confidence that, when life changes, you’ll have the tools, clarity, and support to handle it.