Far from being a happy event, for some people, receiving a financial windfall can prove an enormous emotional shock. Whether you’re selling your business or inheriting, maybe a successful entrepreneur, sudden wealth can feel overwhelming and can even result in a recognised psychological condition called ‘Sudden Wealth Syndrome.’

Varying from person to person, symptoms can include feelings of isolation, uncertainty about the future, fear of losing new-found financial stability, and guilt about the good fortune. Adapting to this new financial status can lead to poor mental health and self-destructive behaviour, such as embarking on risky investments or excessive spending. Our mental state has an impact on how we handle our money. Almost half (46%) of people with problem debt also have a mental health issue (4) . Stories about people who win the lottery jackpot before losing it all, or getting into debt, are commonplace.

Step by step

Although we can’t always plan for it, or avoid some of the negative feelings associated with a windfall, there are things we can do to safeguard our finances:

• Avoid hasty decisions – put your windfall into an easy-access savings account(s) (within Financial Services Compensation Scheme limits), where it can accrue interest, until you have decided what to do with it

• Keep it under the radar – Sudden Wealth Syndrome can cause anxiety and paranoia that people only like you because you have money. Keeping things discreet will help alleviate these feelings and help with clear decision-making

• Take professional advice – investing or spending large sums of money without advice can be catastrophic for your finances. Investment and tax planning advice are essential to help you make wise decisions and ensure your new-found wealth works hard for you and your family.

(4)  Money and Mental Health Policy Institution, 2019

It is important to take professional advice before making any decision relating to your personal finances. Information within this page is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.

Equity release will reduce the value of your estate and can affect your eligibility for means tested benefits.

Tax, Estate and Inheritance Tax planning are not regulated by the Financial Conduct Authority

The value of pensions and investments can fall as well as rise. You may get back less than you invested.

Will writing is not part of the Quilter Financial Planning offering and is offered in our own right. Quilter Financial Planning accept no responsibility for this aspect of our business.

CA Financial Services Ltd are an Independent Financial Adviser based in Sevenoaks, Kent. From our Sevenoaks offices, we offer IFA services throughout Tonbridge, Tunbridge Wells, Dartford, Orpington and across into Sussex and Surrey. Please call us on 01732 617 950 to book a free initial appointment.

CA Financial Services offer financial advice, pensions, investments, ISAs, Equity Release and Inheritance Tax Planning for the whole family. We have 14 years’ experience as Financial Advisers based from Sevenoaks and are truly independent, allowing us to give our customers the best financial advice possible.

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