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Personal Finance - Mid-career issues for GPs

In the third of this five-part series, Phil Mileham looks at how to consolidate and protect your finances.

There are options when saving for your children’s education or future (Photograph: SPL)
There are options when saving for your children’s education or future (Photograph: SPL)

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As you get established in your career, you may become a practice partner or single-handed GP and, in this role, you will probably be self-employed.

If you are moving from a salaried job, you will lose many or all of your employment contract benefits, such as sick pay.

However, there are income protection products that will pay you a proportion of your pre-incapacity income if you are unable to work through illness.

Think too about how your practice would cope if a partner falls ill or dies. Partnership protection insurance will enable the remaining partners to buy the sick partner's (or their beneficiaries') share of the practice.

Key person insurance is also worth considering in case a practice employee with an integral role falls ill or dies. A locum policy too might be needed to cover the costs of a locum if a partner or salaried GP is absent due to sickness or an accident.

The surgery itself needs protecting, and a comprehensive surgery policy will combine mandatory legal cover - employer's liability - with other essentials, such as public liability, contents insurance and business interruption. The policy should always provide indemnity levels appropriate to the surgery's specific needs.

Our records show that claims for vaccines are on the increase, so check that stocks of vaccines/refrigerator drugs are adequately insured.

Family finances
You will want to plan for your children's future and this might include private education, university fees and support with buying a first home and so on. Start saving as early as possible to take full advantage of tax-efficient savings and investment products.

Individual savings accounts (ISAs) are a tax-efficient way of saving for your children's future. If ISAs are in your name, you can retain full control over the funds. Young people over 16 can hold cash ISAs in their own name. The current annual ISA allowance is £10,680 a year, of which £5,340 can be in a cash ISA, and the remainder in a stocks and shares ISA.

There is a wide range of options, including National Savings and Investments products, child savings accounts and collective investments, such as unit trusts. If grandparents or other family members want to help, it might be possible for them to contribute. A financial adviser can explain all the options.

As your earnings increase, it is a good idea to review the level of your personal insurance cover.

For example, if you have valuable possessions or have made significant improvements to your home, you might find your home insurance cover level is too low and you could be out of pocket if, say, there is a break-in or a fire.

  • Phil Mileham is national sales manager with Wesleyan Medical Sickness, www.wesleyan.co.uk

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