Client Story: Changing family needs

Financial Planning incorporating changing family needs through investment, retirement and estate planning 

The clients’ aims – and what they really needed

In 2013 Simon met Anne and David, age 59 and 58. Anne was a teacher and David a self-employed architect. They lived in a lovely old cottage, had a French holiday home, buy-to-let property, investment funds and a mix of pension plans. Initially, they approached The Lost Coin Financial Planning Ltd intending to open a new ISA each, using David’s investments and capital gains allowance. When Simon asked them about social, environmental and ethical funds, Anne was keen. Simon showed David like-for-like performance figures, which soon ended his doubts about such funds.

Asking a few questions meant that Simon was able to get a fuller picture of Anne and David’s situation, beyond wanting a new ISA. Simon was able to offer Anne and David help that neither of them had anticipated or known to ask for.

Dealing with pensions: many pots, many options

As the working relationship progressed, it became clear that Simon could help Anne and David make the best of their numerous pensions. In autumn 2015 David was fast approaching 60 and an old pension was due to mature. It had a high guaranteed annuity rate of 9.8%, almost double the current market rate. However, the plan was not wholly suitable for him as there was no option for a spouse’s pension. So, with Simon’s advice, he opted for a full pension, with no tax-free cash and the full 10-year income guarantee. Even as a higher-rate taxpayer it would have been very hard to beat that level of income, without risk and guaranteed for life.

At the same time, Anne had just retired from teaching and started her teacher’s pension. However, she also had a stakeholder pension and an additional voluntary contribution scheme. Anne had a target net income in mind and wanted to maximise the benefits of her stakeholder and additional voluntary pensions to help her achieve her aim. When Simon asked about Anne’s health, she disclosed a back injury and so Simon suggested looking at enhanced annuities. This gained her 9% extra pension income for life, with a 14-year income guarantee. Anne decided to defer her stakeholder pension to the next tax year to limit her income tax position.

Think about the future: take action now

In summer 2016, Anne’s stakeholder pension was transferred to a modern, flexible, drawdown pension. This enabled her to start an income equal to her expected state pension, which is payable at age 66. At that point, she intends to stop her flexible income and leave the pension plan to grow, for the benefit of her grandchildren. By thinking carefully about what she wanted to achieve, Anne was able to make choices confidently. Not only did this mean the pension fulfilled Anne’s lifestyle in the here and now, it would also work for her long-term goal of providing for her grandchildren.

Review, review, review: the importance of regular advice

A year later, Anne, David and Simon met under The Lost Coin’s standard fixed-fee service. This time Simon prepared a full cashflow report which showed that David could retire early at age 62. He was finding it hard to continue working since Anne had stopped teaching – they had so many things they wanted to do! So, in April 2018 David finished work aged 62. At first he felt guilty, coming from a farming background, though he has grown used to their new lifestyle. This has become even busier with new grandchildren, overseas holidays and visits to France.

Relationships with other professionals

After a few discussions around inheritance tax, Anne and David sought independent legal advice in the UK and France. This resulted in them updating their wills and amending the ownership of their French holiday home. While will-writing and legal advice are not Simon’s area of expertise, Anne and David’s strong working relationship with Simon meant they could speak openly about their ambitions. Simon recommended they contact the relevant professionals; Anne and David can now rest assured that the entirety of their affairs is in order.

A constantly emerging picture: in finances and in life

Simon reviews Anne and David’s investments and cashflow planning each year. At present, the charges and performance of their discretionary fund manager are under review. The aim is to simplify and de-risk their investments whilst keeping a close eye on tax and charges.

As with any kind of financial planning, it’s vital to review the situation regularly. From a financial point of view, this means that you can ensure the arrangements are still delivering what you expect – as well as offering good value for money. Moreover, life changes constantly. As your lifestyle evolves, so too do your needs. Regular reviews mean that you stay on top of your investments and feel sure that they meet your needs and lifestyle.

A word from Simon…

There is no one-size-fits-all when it comes to financial planning. What works for Anne and David is unlikely to work for the next couple; everyone has their own goals, needs, attitude to risk and range of investments. Also, as you can see, what worked for Anne and David one year, didn’t work so well the next. New grandchildren and a new outlook on whether to keep working had a substantial impact on Anne and David’s priorities, as well as what they wanted from their pensions.

Perhaps you’ve had financial advice in the past. Might it be time for a review? If your circumstances have changed or if you’re curious to get a better understanding of your retirement options, get in touch. There’s no charge for an initial consultation with Simon. And perhaps that conversation could give you the steer you need to achieve your goals.

The value of your investment 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. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

The Financial Conduct Authority does not regulate Estate or Tax Planning or Will writing.

Sound, clear and timely financial advice

Simon has been our family financial adviser for the past three years. During that time he has provided sound, clear and timely financial advice. He researched the optimum personal pension for me; one that was the envy of many of my colleagues as it included salary sacrifice and was tax efficient. After listening to our needs carefully, he applied his comprehensive understanding of pensions, and the wider financial system, to provide detailed personal advice. He has a solid Christian faith and this underpins his whole ethos and business. I am very happy with his service and believe he offers value for money. Both my wife and I trust him implicitly and regularly recommend him to our family, friends and work colleagues.

Rhett from Swindon, March 2015

Simon made it very easy and beneficial for us all

I would recommend Simon to anyone who needed pension help or advice. From day one he was very quick to respond to any questions or queries in respect of my private pension, which I chose to release due to ill health. I was very nervous about
making the right choices for my family and I and Simon made it a very easy and beneficial for us all. I really fell that the advice he gave was true and honest

Lesley from Melksham, January 2014

One very important factor for me is that he engenders a sense of trust

Comparing Simon to my previous adviser, one very important factor for me is that he engenders a sense of trust and backs this up with actions that shows the trust was well founded. He’s open about costs, talks sensibly about the relative merits of the options on the table and is prompt in meeting his commitments. One particular area of expertise that was of value to me was his knowledge of ethical investments.

Steve from Evesham, February 2012 (and still an active client)

He has helped set up a pension scheme for one of my top clients

Simon gives creative and extremely practical advice on pensions . He has helped set up a pension scheme for one of my top clients. Both my client and I are very pleased with the results. If you have a problem on company pensions than I strongly suggest that you contact Simon.

Peter, tax adviser, from Waltham Cross, March 2010 (and our mutual client is still active)

Would happily recommend Simon to any one.

Mr Simon Carlin was very helpful in sorting out my ex company pension with a good end result would happily recommend him to any one.

David from Market Harborough, March 2018