Our clients were a newly married couple, both of whom had families from previous marriages. Our clients planned to retire over the next few years and wanted to ensure they had sufficient monies to fund their retirement, they also wanted to make sure they would be financially stable in the event of either dying in an untimely manner. They had a wide range of investments, some held jointly and some individually.
The mix of planning to help them create a clear financial path was complex, so how were we able to help?
As neither of them had received financial advice in the past, they were unsure of the values and benefits of the financial arrangements they held and what to expect from them. We spent a considerable time understanding their life plans and then researched all their various assets (pensions and investments). Once this was achieved, we were able to illustrate the benefits and values of their financial arrangements and the value of monies that would be available to the survivor, should one of them die in an untimely manner.
Some of the key planning actions we recommended were:
- Reviewing the underlying investments in their portfolios, ISAs and pensions and proposing changes to ensure they were suitably diversified and managed in line with their attitude to risk.
- By reviewing historic pension allowances, we were able to maximise their pension contributions which brought substantial income tax and estate planning benefits. As part of this planning we liaised with our client’s accountant to ensure the records of all parties involved in our client’s financial matters were accurate and robust.
- We ensured non-pension assets were arranged in the most tax efficient manner – making use of each of their available tax allowances. This restructuring ensured savings in terms of both dividends and capital gains tax, while securing lower rates of tax where annual allowances were exceeded.
- We also established that a second property owned by the clients, would need to be rented if they were to be able to meet their income in retirement objectives. We were able to inform them of the tax considerations of doing so.
- Taking into account our clients both had families from previous marriages, we provided a planning structure to ensure that once their spouse was secure, their respective children benefited from their legacy, on death. This included updating wills (collaborating with their solicitor), pension death benefits, insurance policies and trust arrangements which were no longer appropriate to their circumstances.
The benefit of our planning was not just financial. Yes, we helped our clients ensure that their investments were structured tax efficiently and suitably invested, but importantly our clients were provided with the reassurance that their financial planning matters were in order and catered for the many needs they had discussed with us.