Financial planning for dentists is crucial for everyone in the profession. Today’s dentists have to be more than healthcare practitioners. They also have to ensure the financial health of themselves and their businesses.

Whether you work for the NHS, in private practice or both, managing your money wisely is paramount. It is vital to your long-term growth, productivity and profitability.

You should also consider personal financial planning to make sure you are prepared should the unexpected happen, such as being unable to work due to poor health.

Alongside this are more routine concerns, such as mortgages and home insurance. There are also life milestones, such as starting a family and, of course, your retirement.

In this guide, we will examine the many different elements of comprehensive financial planning for dentists and explore some of the expert guidance that’s available.

Today’s dentists have to be more than healthcare practitioners. They also have to ensure the financial health of themselves and their businesses

Financial planning for dentists: plan ahead

Financial planning might not be top of the agenda for a newly qualified and time-poor dentist. However, it is the best way to ensure your long-term financial health.

It is a good idea to begin by setting out your aims and objectives. What do you want to achieve in your dental career? Putting the right things in place at an early stage means potentially fewer unwelcome surprises later down the line and a more secure financial future.

These plans don’t need to be set in stone, of course. But a solid foundation means that changes to your plans later will be easier to navigate.

For example, it may be worth putting money aside into a savings pot. This has several potential benefits. It could later be used as a deposit or to build up your credit rating, should you later wish to take out a loan to start your own practice, for example.

And, while it may be the last thing on the mind of a younger dentist, it pays to prepare for your retirement and to think about pension planning from the offset.

Here are some key areas to consider:

Investments and wealth management

Many dentists will have various investments and pension pots. Making sure they are in good health and performing well is important. However, as a busy dentist, it’s easy to lose sight of this alongside caring for patients and performing other business-related duties.

Investments need to be reviewed regularly to ensure that they are in line with your attitude to risk and your objectives. Their performance should be kept in check and charges should be fair and comparable to other similar funds in line with your risk profile.

These factors then need to be measured against your own unique circumstances. For example, if you are approaching retirement, it might be a good time to reduce the level of risk.

It may be the case that investments are not appropriate for your business needs. Or perhaps consolidating your loans into a single pot would make them easier to manage.

Most dentists will benefit hugely from drawing on the knowledge of a dental specialist financial adviser. They can assess your situation as a whole and draw up a plan suited to you.

Bear in mind that the value of investments can go down as well as up, and you may get back less than you invest.

Mortgages

Mortgage payments can be a major expense. The length and terms of your agreement should be kept under review.

Securing a mortgage can itself be complex. This is especially true if you are self-employed.

Mortgage length

Broader changes to the economy and financial landscape, such as rising interest rates, have led to a stark increase in the number of people extending the length of their mortgages.

This can save money in the short term. However, as a result, many people are now expecting to continue paying their mortgage well into retirement.

This raises the question: how will you pay for that once you are on a pension?

There are many factors to consider. Could you pay it from your pension pot? Would you be willing to work longer, past retirement age? If so, do you have income protection in place that would cover you for your extra years of work, should something unexpected happen

Decisions like this can be complicated and require careful consideration. This is where it is important to consult an expert.

Your mortgage is secured on your home.  Your home may be repossessed if you do not keep up repayments on your mortgage.

Pensions

It’s never too early to plan for your retirement. How you do so depends on your individual circumstances and ambitions.

NHS pension scheme

For active members of the NHS pension scheme (NHSPS), a number of excellent pension and employment benefits are offered.

The NHS pension is a defined benefit scheme. This means that regardless of how much you accrue, your pension income is guaranteed to a certain level, as calculated by a formula.

For pensions built up after 2015, the value is based on career average revalued earnings (CARE). For those before, it is based on a combination of income and length of salaried service.

The NHSPS also provides an ill-health retirement provision, unlike private policies.

The NHSPS has different features to a personal pension. There are benefits of using a personal pension and other revenue streams as well as the NHSPS as part of retirement planning. 

Private pensions

Private pensions are based instead on defined contributions. Here, you build up a pot of money for use in retirement. It is up to you to decide how much you pay in and how frequently.

You can also decide how much risk you want to take with your pension fund. For example, it could be split it into several pots, each with different levels of risk.

Private pensions can also give you the opportunity to withdraw a lump sum once you retire. Depending on your individual circumstances, this may be useful. However, it is important to ensure that you have access to enough money throughout the rest of your retirement.

Or, more defensively, you may wish to withdraw a set percentage every year. This allows your investment to grow and replace what you take out.

This can be helpful, because you don’t know how long your retirement will last. You can also change this rate when the state pension kicks in.

Early retirement

Another thing to consider is whether you wish to take early retirement. This might seem like a good option if you are struggling with increased workloads, which could result from NHS pressures or an increase in private patients.

Some policies may allow this, but it can have consequences you should be aware of. For example, early retirement means fewer years of paying into your pension fund. It also means more years withdrawing from it, resulting in smaller payments.

Partial retirement or retire and return

Partial retirement is a way of gradually transitioning from full-time work to full-time retirement if you are an NHSPS member.

It means you have access to your pension while retaining your contact and benefits. It also means you need to reduce your pensionable work commitment by 10%. However, you might find it difficult to cut your hours while maintaining management commitments, for example.  

Retire and return means taking your full NHS pension and then taking a 24-hour break from work before returning. You can then rejoin the pension scheme and continue to pay into it.

Retire and return offers flexibility. However, it also means losing your original contract. As a result, you would potentially need to rely on your employer or practice partners to rehire you.

Speaking with a specialist financial adviser can help you to understand the pros and cons of each option for your circumstances.

Legacies and inheritance

Issues surrounding inheritance and your legacy can be important to look at early, especially if you consider inheritance tax.

There is no inheritance tax to pay if the value of your estate – your property, money and possessions – is under the current threshold of £325,000. Owners of residential properties may be eligible for an additional £175,000 of tax-free allowance as well.

If you leave anything more after that, it will be subject to the standard 40% rate of inheritance tax. However, there are ways to mitigate this.

Firstly, it is important to consider how much income you want for your retirement. What will your expected expenditure be? Do you have any plans for things like travelling or taking up a new hobby? These considerations will be important when you plan how much to set aside for your loved ones after you die.

You may be able to invest money into a trust. Another option would be to gift money to your loved ones in advance. However, it’s important to be aware that should you die within seven years after making these investments, inheritance tax may apply.

Legacies and inheritance can be complex issues. A specialist financial adviser can help to ensure that you achieve the best possible outcome.

Please bear in mind that advice in relation to inheritance tax planning is not regulated by the Financial Conduct Authority. Tax treatment depends on individual circumstances and may be subject to change in future.

Business protection for dental practice owners

Part of sound financial planning for practice owners involves preparing for unexpected events, no matter how much we might want to avoid thinking about them.

There are various forms of protection available. It is important to consider which is right for you. That means taking a close look at the value of your practice or practices and what impact various scenarios may have.

One example is the sensitive issue of protecting your business should you or a partner become critically ill or die.

Have the right agreements in place

Have you got an agreement in place detailing what to do with the share of the business belonging to a partner who can no longer work? Have you given it much thought or discussed it with your partner?

There are many factors to consider. What would you want to happen to your share of the profits? Would you like your family to receive the benefits of your share of the business? If so, it is vital to consider and understand where that money would come from.

Ensuring you have the correct legal agreements in place for your business and that these are underpinned by the correct legal agreements, is paramount when it comes to future-proofing your business and your legacy.

This also involves identifying any key member of staff within your practice. You may have a dentist with specific skills who draws in a sizable amount of income, for example. Or perhaps a practice manager who understands the ins and outs of the business to the extent that it would grind to a halt without them.

It is important to consider your key people and what you would do should the worst happen.

Making sure you have the right protection and plans in place to cover for such eventualities could be vital to securing the financial future of your practice.

Financial planning services

Wesleyan Financial Services

With you on every step of life’s journey

Wesleyan Financial Services provides advice and support from when you first embark on your professional career to when you’re drawing your pension. It understands the complexities and nuances of modern dental career paths, and how these influence your life.

Wherever you are in your life, it makes sense to speak with Wesleyan Financial Services’ specialist team of advisers.

Protection for you and your home

Wesleyan Financial Services can help to ensure you, your family and your lifestyle are covered for every eventuality. Following the experience of the COVID pandemic, many of us have seen how events beyond our control can knock us off track.

The team of Insurance Consultants at Wesleyan Financial Services can find policies that suit your unique needs, while negotiating the right price for you. These include:

• Income protection
• Critical illness cover
• Home insurance
• Dental practice insurance
• And much more.

Wesleyan Financial Services is a broker and insurance products are provided by a number of selected insurers.

Family finances

Starting a family can have a huge impact on your finances. However, Wesleyan Financial Services can help make the transition as smooth as possible and help you prepare for major milestones.

This includes having suitable savings plans in place for maternity and parental leave, setting up a junior ISA and preparing for educational fees.

The value of investments can go down as well as up, and you may get back less than you invest.

Pensions

‘When we look at career average revalued earning statements for dentists who are getting near to retirement, it’s in the early years that pension pots have grown the most and made the biggest impact.’

Neil Richardson, dental regional manager at Wesleyan Financial Services.

Whether you’re just starting your career or approaching retirement, its specialist advisers are on hand to offer pensions guidance. Although this may not be a key priority for younger dentists, it’s never too early to think about your retirement. The earlier you start, the greater the potential benefit.

You may be paying into the NHS Pension Scheme (NHSPS), a private pension or other investments. Whatever your circumstances, Wesleyan Financial Services can help you to reach your retirement goals.

Wesleyan Financial Services is also recognised by the NHS as able to provide guidance on the NHS Pension Scheme and can clarify the complex choices that accompany it.

Easing into retirement

If you’re not quite ready to down your tools or you’d like to start accessing your pension without reducing your income, then you might be considering an alternative route into retirement.

Specialist financial advisers can talk you through all your options – from ‘retire and return’ to partial retirement. They’ll cut through the jargon and give you practical advice to help you retire the way you want.

Retiring early

Are you thinking about leaving dentistry before your state retirement age? Taking an early retirement requires some extra planning and consideration, which is where your Specialist Financial Adviser can help.

You’ll need to make sure you can afford to retire early, as you’ll have additional years to cover. There’s also the matter of your NHS pension. Your benefits could be calculated differently depending on when you retire, so it’s important to get financial guidance on what this means for you.

Mortgages

For everything from taking out your first mortgage and navigating challenges as a self-employed dentist to changing your mortgage’s duration ahead of retirement, Wesleyan Financial Services will have your back.

The team work with lenders who understand dentistry and its associated income patterns to find the right mortgage tailored to you.

Always remember your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments.

Wesleyan Financial Services provides broker and advice services, for which a fee may apply. Product fees may be payable to the lender.

Buy and grow your practice

When you’re ready to venture into practice ownership, Wesleyan Financial Services can help you every step of the way.

Its specialist financial advisers work with Watts Commercial, an award-winning* whole-of-market financial broker. This ensures that lenders are found who understand dentistry and its associated income patterns to find the right commercial mortgage tailored to you. They’ll also support with your lending needs if you are looking to expand your practice or group.

What’s the best business structure for you? There is a lot to think about, but fortunately Wesleyan Financial Services has the experience to help your business thrive. They will even support you through the application process.

* ‘Commercial Mortgage Introducer of the Year’ at the 2024 Business Moneyfacts awards.

Wesleyan Financial Services Limited is working in partnership with Watts Commercial Finance Ltd. to provide a number of business finance solutions.

Authorised and regulated by the Financial Conduct Authority (FCA), Watts Commercial Finance Ltd. is a broker with access to the whole of market.

Wesleyan Financial Services Ltd. will receive commission from Watts Commercial Finance Ltd. upon completion of the loan. The amount of commission received is variable.

Please note that the Financial Conduct Authority (FCA) does not regulate commercial mortgages.

Moving from NHS to private

As more dentists cross over to provide private treatment, Wesleyan Financial Services can work with you to make the process as painless as possible.

To ensure your patients can access the treatment they need, Wesleyan Financial Services partners with its sister company, Practice Plan. Practice Plan is the UK’s leading provider of practice-branded dental plans. Wesleyan Financial Services also works alongside the patient finance experts at Medenta to help make treatment more accessible for patients.

There are other implications to going private too, such as replacing NHS pension and sick pay benefits. Wesleyan Financial Services can help identify new plans to keep your finances on track.

Award-winning investments team

With Wesleyan Assurance Society’s award-winning* investment team, you’re in safe hands. The investments team is made up of fund managers, an investments research team, a property team and a sustainable investment team.

Wesleyan Financial Services’ team of specialist financial advisers knows how to support dentists to reach their goals. They will help you keep track of your investments and pension pots and offer tailored advice. This way, you can be sure that your money is given the best possible chance of higher financial returns over the long term.

The team of advisers adopt a ‘life coach’ approach. They will analyse your needs and financial circumstances before working with you to help you achieve the lifestyle you are hoping for.

*Insurance Asset Risk Awards 2023, ‘Investment Team of the Year Re/insurer’. Asset Management Awards 2025, ‘Best ISA Provider of the Year’.

Keep in mind that the value of your investments can go down as well as up, and you may get back less than you put in.

Exit strategies

It takes plenty of careful planning to finally sell your practice. You will want to maximise the value of your business legacy that you have worked so hard to build before handing over the keys.

Wesleyan Financial Services’ specialist financial planners can help you to plan an exit strategy and to identify areas that need addressing. They can signpost and work in partnership with dental solicitors, dental accountants and dental estate agents to help to maximise the profitability of the business.

Secure your legacy

How will you ensure you leave behind a good inheritance for your loved ones? There are plenty of things to consider, not least ensuring that you do not pay too much inheritance tax (IHT). Wesleyan Financial Services’ specialist financial advisers will help ensure that you don’t pay too much IHT when you pass on property, savings and investments.

Please note: Inheritance Tax Planning is not regulated by the Financial Conduct Authority (FCA).

Future proofing

No matter how well you plan for the future, some things are beyond your control. You can’t influence things like inflation, taxes or interest rates. But you don’t need to lose any sleep over budget day surprises or global energy market disruptions. Wesleyan Financial Services keeps its finger on the pulse, helping you plan for all eventualities in advance where possible.

You and your specialist financial adviser can discuss your current situation and how potential changes could affect you. Then, if things do change, you will understand their impact and be informed enough to take action when necessary.

Financial advice when you need it

Along with Wesleyan Financial Services’ team of experts, there’s also a wealth of information and guidance through interactive events and webinars. Working alongside industry experts, they ensure that they share useful insights and updates through a host of blogs, podcasts and videos.

Some events will even count as CPD.

Chase De Vere Dental

Chase De Vere Dental adheres to the following process with its clients

• Introductory meeting: Chase De Vere Dental begins its relationship with customers at their homes, workplaces or its local offices. This meeting allows both parties to discuss the dentists’ requirements

• Information gathering: Chase De Vere Dental collates as much information as possible on clients and their financial objectives

• Financial analysis: an advisor will then analyse a client’s financial situation and how that relates to needs and priorities

• Recommendations: Chase De Vere Dental will draw up a unique financial strategy for its clients as part of their personal financial plan

• Implementation: When a financial plan has been agreed upon, Chase De Vere Dental will put it into action

• Ongoing review: an adviser will then work with the client to ensure the plan stays on track for the long term.

Financial advice

Chase De Vere Dental offers financial advice for dentists from independent specialist advisors in the following areas:

• Specialist insurance: Chase De Vere Dental works alongside specialist healthcare sector insurers MIAB. It offers business overheads insurance, indemnity insurance, private medical insurance and practice insurance
• Pensions and retirement advice: Chase De Vere Dental can offer advice on making the most of the NHS pension scheme. It also advises on the most effective private pension options and additional saving strategies
• Investments: advisors will take into consideration your goals and appetite for risk. They will then plan, implement and continually monitor an investment strategy based on your needs. Chase De Vere Dental can advise on a wide range of investment funds and products, including ISAs, pensions and investment bonds
• Financial protection: Chase de Vere Dental’s advice is based on individual personal and professional needs and circumstances. It covers income protection, life insurance and critical illness
• Estate planning: advisers can calculate how much inheritance tax you would be likely to face and explore ways to hold assets more tax efficiently. It can also explore using gifts and exemptions to lower the tax bill
• Mortgage advice: Chase de Vere Dental mortgage advisers will use their understanding of the market and relationships with vendors to help you choose mortgage products. As independent advisors, they have access to the whole market. They will even complete the paperwork on your behalf. Chase de Vere Dental also offers a residential bridging finance service. This can help secure the funds you need for a purchase before other funds become available.

PFM Dental

PFM Dental in numbers…

• 50+ practice sales over the past year
• 1,200+ dental accountancy clients
• £15m+ practice finance raised.

Sales and valuations

PFM helps dentists as they come to the end of their careers. When it’s time to retire, it will use its comprehensive knowledge of the market to value, market and sell businesses. Its specialist team is devoted entirely to valuing and selling dental practices.

PFM uses a vetted list of individual buyers, major corporates and small dental groups, among others. These help ensure a fast and reliable sale. Its priority buyers scheme means that agency fees are frequently paid by the buyers themselves.

Financial planning

PFM Dental’s financial planning service offers its independent, specialist financial planning expertise to practice owners, associates and retired dentists. 

Its service brings together specialist knowledge, technical expertise and independent advice to ensure the best for its clients. Its long-term wealth management service aims to help dentists fulfil their own unique retirement plans.

PFM offers expert advice on lifetime and annual pension allowances, inheritance tax and reducing tax liabilities.

Accountancy

PFM’s dental accountancy firm is one of the largest in the UK. It works exclusively for dentists, with its clients ranging from practice owners and associates to corporates. Its experts can help dentists make the most of their available income and allowances.

Legal

PFM Dental’s legal team is led by dental solicitor Stephen Knowles, who has advised on practice sale transactions since 2005. He is also the former chair of the Association of Specialist Providers to Dentists.

His team offers comprehensive advice on buying and selling dental practices in England and Wales. It also offers expertise on the complexities of issues like transferring NHS contracts and adherence to Care Quality Commission requirements.

PFM offers fixed fee quotes.

Wealthwide

Specialist services for dentists

Wealthwide offers a range of bespoke services for dentists, including:

• Financial planning: Wealthwide can help dentists understand their NHS pensions, the implications of buying and selling practices, insurance policies and how best to identify mortgage companies that can work with variable incomes
• Wealth management: Wealthwide helps dentists to ensure the money they invest is done so sensibly, efficiently and sustainably. It starts by discussing investment aims and attitudes to risk, allowing it to develop a tailored long-term portfolio strategy
• NHS pensions: Wealthwide experts can help clients understand the complexities of the NHS pension scheme and its benefits. It offers advice on issues ranging from early retirement to minimising tax charges 
• Mortgages: as an independent broker, Weathwide can identify the best mortgage for dentists’ needs and circumstances. That’s whether they are principals, self-employed associates or employed. It uses mortgage-sourcing software that is updated daily to compare lenders and products. Wealthwide also offers clients a dedicated administrator
• Insurance: Wealthwide brings together the best elements of various insurers to make sure self-employed dentists are fully covered for all eventualities. It can help dentists secure income protection, mortgage protection, life assurance, death-in-service protection and critical illness coverage.

Trusted advisers

Wealthwide is a member of the Association of Specialist Providers to Dentists. Its network includes specialist accountants, solicitors, bankers, practice agents and valuers. It can connect its clients with these advisors to meet your needs and requirements.  

Independent advice

Wealthwide offers independent advice, allowing it to find you products and services from across the whole market. It can advise dentists on financial products including insurance, mortgages, savings, investments and pensions.

Independently owned

Wealthwide says its independence means dentists can rely on long-term personal services from a trusted advisor and support team. Most of its clients have been with the company for more than a decade. It works based on fees but also offers younger associates payments on a commission basis.

Conclusion

Financial planning is key to a successful career in dentistry. This guide has offered advice to help you set financial goals and achieve long-term financial stability.

Financial planning should always be on your mind, no matter where you are in your career. As circumstances change, it is important to adjust your plans accordingly.

Seeking professional advice can be of huge benefit and allow you to focus more attention on your patients.

Take time to make the right decisions to help ensure that your business is built on strong financial foundations.