When we meet our clients, some of the most common questions we are asked are:

  • When can I afford to retire and how much can I spend?
  • How much do I need to save to meet my desired lifestyle in retirement?
  • What level of return do I need to meet my desired lifestyle in retirement?
  • How much risk do I need to take with my investments?
  • Can I afford a large capital expense such as a new car, or make gifts to family?
  • Can I meet my goals if my investments don’t perform as well as expected?
  • How would my family cope if I am unable to work, or if I die prematurely?

Having a financial plan can provide you with the answers to these questions. Cash flow modelling is an important part of our financial planning for clients. It helps us to answer many of these concerns by allowing us to forecast your current and future financial situation.

When creating a financial plan, we will firstly establish your lifetime goals. We will then assess your current situation and determine how close you are to achieving your goals based on aspects such as your income, expenditure, assets and liabilities.

After this, the next step is to develop and implement a plan to establish what action you need to take. The plan can then be used to help make well informed financial decisions. As your situation evolves over time, the plan will be monitored and reviewed and adjusted where necessary.

When the cash flow is run, there are typically two scenarios:

1) You have a surplus of assets. This means you can meet your financial goals and opens opportunities to discuss the potential for:

  • Retiring early
  • Enhancing your lifestyle by increasing expenditure.
  • Making gifts to family
  • Reducing inheritance tax liabilities
  • Reducing unnecessary risk associated with your investments.

2) You have a shortfall of assets. This means your financial circumstances are not sufficient to meet your future aspirations. The advantage of having a plan will highlight potential shortfalls or threats to your situation and put you in an informed position well in advance. This means you can do something about it at an early stage and remain in control of your financial future. It opens opportunities to discuss:

  • Your desired retirement age
  • How much you need to save to achieve your goals
  • The level of return you require to meet your goals
  • Assessing the level of risk you are taking with your invested assets.
  • If there is the potential to downsize or other methods of releasing capital
  • Reducing expenditure in retirement.

Example – Income Shortfall in Retirement

The following chart shows a forecast of a client’s cash flow over their lifetime. Each bar represents one year. Where they are coloured blue, it means there is enough income or liquid assets to draw upon to meet the client’s income need for the year. The need is represented by the black line running along the chart. Where bars are coloured red, there is a shortfall. In other words, there is not enough income or liquid assets to meet the income need for that year.

In the following example, the client has a shortfall at age 89. Before retirement, there is an excess income which is not being used.

Using the cashflow software, we are able to see what might happen if the excess income is used to fund a stocks and share ISA each tax year. The results are as follows;

The chart above shows that the shortfall has now been filled. This indicates that by investing the excess income in an ISA, the client has a much better chance of achieving their retirement objectives and being able to meet all planned expenses until age 100.

Example – Pensions and Tax planning

The cashflow system can also help to identify future tax liabilities. In the following example, the client faces a Lifetime Allowance Tax (LTA) charge at age 75 due to the value of their pensions. This is demonstrated by the large spike at age 75. In this example, the LTA charge is in excess of £150,000.

The following scenario demonstrates what could happen if the client takes a phased retirement approach. They decide to draw a higher level of income from their pensions in the earlier years of retirement when they are likely to be more active and have a greater need for the money.

This scenario shows that through careful planning, the LTA charge can be eliminated.

In addition, the projection shows that the client can afford to take the additional income and spend more in retirement and there is still no shortfall in the plan.

In summary, having a financial plan can help you stay in control of your financial future by giving a clearer picture of what it might look like. It ensures you have the right provisions in place now, to enable you to make big decisions at the right time, to ensure you can meet your lifetime goals without your money running out.

My wife and I really value the advice and support we’ve received over many years. Our key contact is Tim Cosway, whose friendly and calm manner is a real plus. He also involves team members who are equally committed. We particularly value that their approach is that no question is stupid – we always receive a clear and helpful explanation. We have full confidence in the team’s management of our finances and definitely recommend them.

Howard

We have consulted Holden and Partners for 10 years.  Having been in financial disarray because of poor advice from our previous financial advisor, we have Tim Cosway to thank for digging us out of a deep financial hole.  As a result of his painstaking tenacity pursuing a claim against our former financial advisor through the Financial Ombudsman Service, which resulted in substantial compensation, we can anticipate a comfortable retirement.  We continue to take Tim’s advice on all financial matters.  He is a pleasure to deal with, and we whole heartedly recommend Holden and Partners, and Tim in particular.

Mike & Jacque

I have been a customer of Holden & Partners since its inception. During this time, no matter what the state of the financial climate, I have always found that their advice has been balanced and fair. They have a good understanding of everyone’s individual circumstances and produced tailored strategies to match these needs and expectations.

Duncan B, NHS consultant

I’ve always received high quality, personable advice at a time of my convenience. My adviser has often travelled to my home in order to provide very personal service. The advice given is clear and unambiguous. The risks of different types of investment have been clearly discussed to allow me to make an appropriate decision on the nature of my investment portfolio. This has been of great importance when considering the available investment options for my forthcoming retirement. I have always considered that Holden & Partners is very client centred and they have my best interests at heart. I have been with Holden & Partners since 1996 and have recommended them to friends and colleagues on many occasions.

Michael, Surgeon

Holden & Partners manage our company pension scheme with a totally professional and dedicated approach. They have worked with us over a number of years, and are able to explain the potential ‘minefield’ that is pensions, to make it perfectly accessible for the staff.

Jeremy, Print Management Partner

On retirement after 40 years of salaried employment, I interviewed several financial advisers, amongst whom Mark Dodd of Holden & Partners was the nicest and seemingly the most understanding of my investment needs and priorities. Since then my wife and I have had regular (c.6-monthly) meetings with him in order to check and, when necessary, adjust the holdings in our portfolio. This has been very helpful and provided a comforting sense of confidence and security. I have recommended Holden & Partners to others and will certainly continue to do so.

Patrick, retired university professor

It’s easy to feel powerless in the face of global trends such as climate change and environmental destruction. But I feel I regain power as a consumer and a citizen by thinking about where I spend my money and to whom I entrust my savings. I chose Holden and Partners because they were recommended to me and because of their strong track record in ethical investments. It has proven to be a wise choice. Their advisors listened carefully to my needs and created an investment strategy and portfolio that has met and indeed continues to exceed my expectations. The culture of a company also matters to me, I have found their advisors to be well informed and financially shrewd but also easy to speak to and engage with. Many of us find it difficult to trust institutions and organisations these days, but I do trust Holden and Partners to make the right decisions on my behalf.
I would have no hesitation in recommending them to others.

Patrick, Advertising and Marketing Consultant

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Whether it’s a question about your personal finances or how you can invest your wealth more ethically, we are here to help. Call us on 020 7812 1460, email info@holden-partners.co.uk or complete the form: