The Financial Health Check Every Doctor Should Have Once a Year

Doctors spend their careers looking after the health of others, but there’s another check-up that can be surprisingly easy to put off.

Your own financial health check.

For healthcare professionals, finances can become complicated quickly. Your income may change throughout your career. You might have several sources of income at the same time. There are tax considerations, NHS pension benefits, private work, practice finances and longer-term decisions around retirement.

And when you’re working in a demanding profession, it’s understandable that reviewing all of this can slip down the list.

But just as a regular health check can identify potential problems early, an annual financial review gives you the opportunity to understand where you are now, where you want to be and whether anything needs attention.

So, what should your annual financial health check include?

1. Start with your overall financial position

Before looking at individual areas, take a step back.

Has anything changed over the past 12 months?

Perhaps you’ve taken on additional private work, become a GP partner, reduced your NHS hours, changed roles or started thinking more seriously about retirement.

Changes in your professional or personal circumstances can have a knock-on effect across your finances.

Your annual review is an opportunity to bring everything together rather than looking at individual decisions in isolation.

2. Check your NHS pension

For many doctors and healthcare professionals, their NHS pension will be one of their most valuable financial assets.

Yet understanding exactly what you have built up, what you could receive in retirement and how decisions during your career may affect your benefits isn’t always straightforward.

At least once a year, it is worth reviewing your pension position and asking:

• Are your records accurate and up to date?
• Do you understand the benefits you’ve built up?
• Has your expected retirement date changed?
• Have changes to your working pattern affected your plans?
• Are your pension and wider retirement plans working together?

The closer you get to retirement, the more important these conversations become, but pension planning shouldn’t begin a few months before you intend to finish work.

3. Look at all of your income together

One of the things that makes financial planning for medical professionals different is that income doesn’t always come neatly from one employer.

Depending on your career, you could have income from your NHS role alongside private practice, locum work, teaching, consultancy, medico-legal work or other professional activities.

Individually, each income stream might seem relatively straightforward.

The important thing is understanding what they mean collectively for your tax position.

An annual review gives you the chance to look at the complete picture and plan accordingly.

4. Review your tax position before there’s a deadline

Tax planning is very different from completing a tax return.

Your tax return looks backwards and reports what has already happened. Good tax planning looks forward.

Rather than waiting until January to discover what you owe, reviewing your position during the year gives you more time to plan.

It can also help you understand whether you are setting aside enough money for tax and whether changes to your income could have wider implications.

There should be no reason for your tax bill to come as a complete surprise.

5. Review your expenses and record keeping

This is particularly important if you’re self-employed, undertaking locum work or receiving income outside your main employment.

Are you keeping accurate records?

Are you capturing relevant business expenses?

Are receipts and invoices stored properly?

Is your bookkeeping up to date?

With Making Tax Digital changing the way many taxpayers keep and report their financial records, good digital record keeping is becoming increasingly important.

Getting into a regular routine can also make life considerably easier when deadlines arrive.

6. Think about financial protection

Your ability to work and earn an income is a significant financial asset.

Yet protection is one of those areas people often arrange once and then forget about.

Your annual financial health check is a good opportunity to review what would happen financially if illness or another unexpected event prevented you from working.

Consider whether your existing arrangements still reflect your income, family circumstances, debts and financial commitments.

Life changes. Your protection should be reviewed as it does.

7. Check your savings and longer-term plans

Not every financial goal is about retirement.

You may be planning to buy or move home, fund your children’s education, reduce debt, build investments, take a career break or simply create more financial flexibility.

Ask yourself:

What do I want my money to allow me to do over the next five, ten or twenty years?

Once you know the answer, you can assess whether your current financial arrangements are actually moving you towards it.

8. If you’re a GP partner, check the health of the practice too

For GP partners, personal financial health and practice financial health are closely connected.

Your annual review should therefore look beyond your individual tax position.

Consider areas such as:

• practice profitability
• cashflow
• drawings
• staffing and other costs
• partnership changes
• investment requirements
• financial forecasting

Knowing what happened last year is useful. Understanding what is likely to happen next is considerably more valuable when you’re making decisions about the future of the practice.

9. Look ahead to retirement, even if it feels a long way off

Retirement planning isn’t simply about choosing a date to stop working.

For healthcare professionals, it could mean reducing sessions, changing the balance between NHS and private work, taking partial retirement or gradually stepping away from clinical practice.

Starting the conversation earlier gives you more choices.

Your annual check-up is an opportunity to ask a simple question:

If I continue on my current path, am I heading towards the retirement I actually want?

If the answer isn’t clear, that’s worth exploring.

One appointment. The bigger picture.

A financial health check isn’t about finding problems for the sake of it.

It’s about making sure all the different parts of your financial life are working together.

Your career, income, tax, pension, practice interests, family circumstances and plans for the future don’t exist independently of one another. A decision in one area can affect another.

That’s also why financial advice for healthcare professionals shouldn’t be one size fits all.

A locum at the beginning of their career will have very different priorities from an established GP partner or a consultant considering retirement.

The important thing is knowing where you stand.

When did you last have a financial health check?

At MedFinancial, part of the Exchange Accountants Group, we specialise in supporting doctors and other healthcare professionals throughout different stages of their careers.

Our aim is to take the complexity out of medical finances and provide clear, practical advice based on your individual circumstances.

If it has been more than a year since you properly reviewed your financial position, perhaps it’s time for a check-up.

Speak to the MedFinancial team to arrange your financial health check.