The man who lost his Bitcoin fortune in a Welsh tip, and what he can teach you about financial planning

Did you read the recent news story about a man who lost his £620 million Bitcoin fortune in a Newport tip?

James Howells, who held 8,000 Bitcoins – worth around £620 million – on a hard drive, believes his ex-girlfriend mistakenly threw it away, and that his wealth now lies in a landfill site holding more than 1.4 million tonnes of waste, the BBC reports.

Howells has even offered to purchase the entire site, which is set to close and be replaced by a solar farm in the 2025/26 financial year, but his plans have not come to fruition.

While you might not be a Bitcoin multi-millionaire whose wealth is stored on a plastic hard drive, it’s worth noting that your money might be more vulnerable to mistakes and shocks than you think.

So, here’s what this unfortunate case of a lost fortune can teach you about the value of effective financial planning.

 

 

Your wealth could be depleted by sudden changes to your circumstances

It’s unpleasant to think about your life changing for the worse, but considering the scenarios that could deplete your wealth very quickly remains an important part of financial planning.

For James Howells, it was the simple act of moving house that led to his wealth becoming lost, perhaps forever. But for most people, more severe circumstances might come up that have a similar impact.

Here are some to consider.

• Becoming ill or injured, leading to a break from work or an early retirement
• Taking on caring responsibilities for an ill loved one, such as a parent, spouse, or child
• A life-changing event, such as a house fire, meaning you need to rebuild from scratch
• Divorce or bereavement having an impact on your income and mental wellbeing.

While there are ways to protect your wealth from a loss of income, remember that we can’t always anticipate life’s twists and turns. The above scenarios could mean you need to dip into savings, sell assets, or even take on debt if you’re unprepared.

Working with a financial adviser might mean that, although you’re going through something serious, you don’t feel alone. Our advisers can help you navigate life’s toughest challenges, and if they have a direct impact on your financial situation, professional support may be invaluable.

 

 

Safeguarding your family’s assets against the unexpected should be a priority

Although Howells’ lost Bitcoin wealth may never be recovered, there are steps you can take today in order to protect your own wealth against unexpected circumstances.

• Life cover

Life cover is an essential cornerstone of any financial plan, but Yu Life research suggests that 8.5 million UK adults don’t have it, and 19% of these people used to have life insurance but cancelled it.

If you were to pass away, your family could benefit massively from a payout. What’s more, if you take out whole-of-life cover and write it into trust, the payout won’t form part of your estate, meaning your family could use it to pay an Inheritance Tax (IHT) bill and keep more of your hard-earned wealth for themselves.

• Critical illness and income protection insurance

Both these forms of protection may offer a financial lifeline if an illness or injury prevents you from working.

Critical illness payouts take the form of a tax-free lump sum that may enable you to pay private healthcare fees or subsidise your income over an extended period.

Income protection, on the other hand, pays a portion of your monthly salary over a fixed period, which may be until you can return to work or retire.

Either or both forms of protection act as a safety net for your wealth, helping you to avoid dipping into savings, depleting your retirement fund too soon, or even needing to sell your home, if you can’t work.

And, working with an adviser means that you won’t be paying for protection you don’t need, while gaining the peace of mind that if something happens, there’s a higher chance that your family’s assets will be safeguarded.

• Lasting Powers of Attorney (LPA)

The latest widespread research into Lasting Powers of Attorney (LPA), conducted in 2022 by Canada Life, revealed that 4 in 5 adults do not have one, including 77% of over-55s.

This essential protective document allows you to appoint an “attorney” – someone you trust wholeheartedly – to manage your finances and/or healthcare decisions if you are unable to. For example, if you lost mental capacity due to a dementia diagnosis or brain injury, you would no longer be able to make financial or healthcare decisions for yourself.

There are two types of LPA:

• Health and welfare, giving your attorney the power to decide where you live, who cares for you, and the kind of treatment you receive.
• Property and financial affairs, which gives your attorney access to your bank accounts, insurance documents, properties, and loans, letting them act on your behalf. You can give your attorney access to these things even before you lose mental capacity if you wish.

We would usually recommend that you register both types of LPA and appoint someone you truly trust, such as a spouse, partner, sibling, or adult child.

Remember: even if you are somebody’s next of kin, this doesn’t give you access to their financial affairs if they are incapacitated. Without an LPA in place, loved ones would need to apply for deputyship through the Court of Protection, which can take months and is expensive.

An LPA could safeguard your wealth, making sure that if you can’t manage it on your own terms, someone you trust will step in and act in your best interests.

 

 

Putting all your eggs in one basket could leave you vulnerable to losses

Turning now to the subject of risk, it’s clear from the story of the lost Bitcoin fortune that putting all your eggs in one basket may not be a sensible choice.

While it wouldn’t be fair to comment on Howells’ financial planning strategy, with regards to your own wealth, we would never advise that the majority of your assets be held in an unregulated and insecure investment such as cryptocurrency.

Instead, our advisers opt for a balanced approach, helping you to spread your investment portfolio across a range of assets and geographical locations. This might include global equities, bonds, and property, to name but a few. This strategy is most commonly called “diversification”.

Diversification is so important because if one asset class experiences a loss or even a crash, the others in your portfolio may hold steady, mitigating the risk of severe overall losses.

For instance, in March 2025, US equities have experienced volatility due to policy changes at government level, which are causing investors to remain cautious. Whereas, European shares have experienced a bump in the same period. If all your holdings were US stocks, your wealth would have significantly decreased in value – whereas holding a balanced portfolio means you can benefit from upticks elsewhere around the globe.

 

 

Manage your wealth alongside a qualified professional

We’re here to help you safeguard your wealth and achieve your goals, whatever they may be.

Email info@chancellorfinancial.co.uk, or call 01204 526 846 to speak to an adviser.

If you’re already a client here at Chancellor, contact your personal financial adviser to discuss any of the content you’ve read in this article.

 

 

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The Financial Conduct Authority does not regulate estate planning, tax planning, or Lasting Powers of Attorney.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

Crypto assets are not regulated financial products so please be aware that trading them carries a considerable amount of risk for your capital. Cryptocurrencies are also not covered by existing consumer protection laws.