How to Spot Hidden Financial Gaps

When life is busy, work, family, travel, goals, it’s easy to assume your finances are ticking along just fine. After all, the bills are paid, the savings are growing, and the pension pot is being topped up.

But financial confidence doesn’t come from assuming everything is in place; it comes from knowing. And from time to time, even the most organised and successful person can overlook important pieces of the puzzle.

In my work as a financial planner, I often meet clients who are doing most things right, yet they’re unknowingly exposed to risk, inefficiency, or missed opportunity. These are the hidden financial gaps that rarely cause problems today but can lead to stress, unnecessary tax, or reduced options later on.

So, if you haven’t done a deep dive recently, now’s the perfect time. Let’s look at five common gaps that could be quietly undermining your financial foundation and what to do about them.

1. Forgotten Pensions and Scattered Savings

Over a long career, it’s easy to accumulate pensions from previous employers, especially if you’ve moved roles, changed sectors, or taken time off for family. Many people don’t realise how many pension pots they have, or worse, they assume someone is managing them.

Likewise, savings and ISAs can end up scattered across different banks or platforms, with no clear strategy guiding them. The result? Your money might not be working as efficiently as it could.

Why it matters:

• Multiple pensions mean multiple charges, varying performance, and administrative hassle.
• Uncoordinated savings can mean missed interest, lost growth, and poor use of tax allowances.

What to do:

• Make a list of all your pensions and savings accounts, where they are, how much is in them, and what they’re invested in.
• Consider whether consolidation could make things simpler and more effective.
• Review your ISA use each year to make the most of your tax-free allowance.

2. Outdated Wills and Missing Powers of Attorney

Having a will is one of the most powerful ways to protect your loved ones and ensure your wishes are carried out. But too often, I come across wills that are decades old, drafted before marriages, divorces, or children.

And even fewer people have a Lasting Power of Attorney (LPA) in place, a legal document that allows someone you trust to make decisions on your behalf if you’re unable to do so yourself.

Why it matters:

• An outdated will can result in assets going to the wrong people or trigger avoidable tax charges.
• Without an LPA, your family may have to go through lengthy and expensive legal processes just to access your finances or make health decisions.

What to do:

• Review your will every few years or after major life events.
• Set up both a financial and health & welfare LPA. It’s just as important as writing a will.

3. No Plan for Inheritance Tax (Even If You Think You Don’t Need One)

Many people assume inheritance tax (IHT) planning is only for the ultra-wealthy, but with rising property values and generous pension savings, more and more estates are creeping over the threshold without realising it.

The current threshold: £325,000 (or up to £500,000 if you leave your home to direct descendants). Anything above this can be taxed at 40%.

Why it matters:

• Your estate could face a large tax bill, reducing what your loved ones receive.
• Without forward planning, you may miss opportunities to reduce or eliminate this tax altogether.

What to do:

• Get an estimate of your total estate (including property, pensions, investments, business interests).
• Explore options such as gifts, trusts, business relief, or life cover to mitigate IHT.
• Speak to a planner about using your pension strategically. It can be a more tax-efficient way to pass on wealth.

4. Gaps in Financial Protection

Protection is the foundation of any solid financial plan, yet it’s often the most neglected area. Whether it’s because we don’t want to think about worst-case scenarios or we assume nothing will go wrong, many people skip over this part completely.

Key types of protection:

• Income protection: covers your earnings if you’re unable to work due to illness or injury
• Life cover: supports your family financially if you pass away
• Critical illness cover: pays a lump sum if you’re diagnosed with a serious condition

Why it matters:

• Illness or loss of income can derail your financial plans overnight.
• Having cover in place provides peace of mind and financial breathing space during life’s toughest moments.

What to do:

• Review what protection you already have (via work or personally)
• Check if the cover still reflects your current income, lifestyle, or dependents
• Consider protection as a core part of your wealth strategy, not an afterthought
• Make sure your life policy is written in trust

5. Unclear or Outdated Beneficiary Nominations

Here’s one many people miss: even if your will is up to date, the beneficiaries named on your pensions or life insurance will take priority. These nominations bypass your will and are dealt with separately, which can lead to unintended consequences.

Why it matters:

• A former partner, estranged family member, or no one at all could be listed on an old form
• If there’s no named beneficiary, the provider might have to make the decision, not you

What to do:

• Contact all pension and insurance providers to check who is listed as your beneficiary
• Make updates as needed and keep a copy in your wealth file
• Set a reminder to review these every couple of years

Final Thought: Awareness Is Empowerment

Spotting these gaps isn’t about feeling anxious or overwhelmed; it’s about creating clarity. When you know everything is in order, you can focus on living your life with confidence and purpose.

Financial peace of mind isn’t about being perfect, it’s about being proactive.

If any of these points struck a chord, it might be time to schedule a financial health check. Whether you manage your finances yourself or work with a professional, closing the gaps today is one of the best gifts you can give your future self.