Financial planning for healthcare professionals

Healthcare professionals can have rewarding careers but they also face distinct financial challenges. Doctors, dentists and vets must navigate a unique financial landscape, dotted with challenges those in other fields may not have to consider.

There is often a long path to becoming a healthcare professional. These professions typically involve significant education costs, which may lead to large student loans and a need for subsequent debt management strategies.

Extensive education, residencies and training periods may also mean a delayed entry into the workforce. This can lead to an inconsistent income stream that must be considered when creating a financial plan.

So if you’re a healthcare professional you may well ultimately achieve a financially rewarding salary, but you could still benefit from careful cashflow management along the way. And if you’re in the initial stages of your career, managing expenses early on could be crucial to helping to achieve your long-term financial goals.

Moreover, you may benefit from medical indemnity insurance. This is designed to pay legal costs incurred in defending allegations of malpractice and to pay any legal damages against a healthcare professional. Such protection can provide you with peace of mind and this ongoing cost would need to be catered for in your financial plan.

Considering career shifts

Many healthcare professionals make the move from the National Health Service (NHS) into private practice. This may bring financial, lifestyle and professional benefits, but it can also involve changes to your financial plans.

If you’ve decided to open your own practice, tax considerations and cost management could become crucial. This could potentially increase your need for regular financial advice.

Moreover, income patterns in private practice would typically differ from the steady salary and relatively clear career progression available to NHS employees. Income from a private practice can, for example, fluctuate in line with patient volume, costs of particular services, and how much patients are charged.

Retirement issues

Thorough retirement planning is as essential for healthcare professionals as it is in other areas of work. Crucially, you need to assess whether you’ll have the size of retirement pot necessary for your desired retirement lifestyle and what adjustments may have to be made if the pot is smaller than desired.

Retirement planning varies from person to person. You may, for example, want to move directly from full-time work into retirement. Or you may prefer to move from full-time into part-time work, and then into retirement. Retirement saving goals and budgets will differ in each case.

At Schroders Personal Wealth, one of our key principles is to have regular reviews with an adviser. Our advisers understand the specific needs of healthcare professionals and can help you at any stage of your career.