We spend our days helping clients to plan their financial futures. What we see is that people face similar challenges depending on their stage of life. At the same time of course, each and every one of us has a unique set of circumstances, has our own specific financial objectives and needs bespoke advice to help us reach our goals.
You see, financial planning is not an exact science. It depends completely on those unique circumstances; your current and potential earnings, your family situation and your assets and liabilities to name but a few factors. And it also depends on what it is you are trying to achieve. For you, is it all about comfort in retirement or are you seeking to maximise your wealth in the shorter term? Is the security of your family your primary concern?
While we clearly acknowledge that everyone is unique, we thought it might be useful to give you a sense of the type of issues that many of our clients see as the big financial challenges at various stages in their lives, and the typical solutions they seek out from us.
The carefree years: Age 20 – 35
Ah the carefree years! At least that’s how they start out for this age group before starting to place an eye on the future. For most clients in their early twenties, the main area of focus is savings, often with one eye on building a deposit for that eventual house purchase.
As our clients move through their twenties and into their thirties, mortgages tend to dominate as we help people get loan approval for that first home. As many of our clients also get married at this time and start their families, they tend to focus on getting protection (health insurance, life assurance, income protection etc.) in place to safeguard their families, financially. The very forward-thinking clients also turn their attention to building education funds for their children and also the start of their retirement funding. These smart people realise that the earlier they start their funding, the more they are likely to have available at retirement, or the earlier they can do so!
The growth years: Age 35 – 50
Paying down mortgage and other debt is a big consideration here, with little spare cash available for other purposes other than protecting their plan. At this stage in our clients’ lives, we see a real commitment to pension funding – making sure that they can maximise the tax breaks available and finding the best pension vehicle for them. We also find at this stage that our clients become a little more aware of their infallibility (remember how indestructible we all felt when we were younger?), and want to ensure that they have the right protection in place to protect themselves and/or their families against the financial consequences of ill-health or death.
For those who are in the fortunate position of having some spare money, they also seek help in building an investment portfolio, particularly in the current low deposit rate environment.
The consolidation years: Age 50 – 65
As the state pension age moves out (eventually to 68) over the next decade, this consolidation period is going to expand. We see many clients at this stage who haven’t yet attained their Financial Freedom continuing to build up their pension funds. At this stage, many are looking to take some of the risk out of their portfolios as they approach retirement.
Another area that we get asked a lot about among this group is in relation to the whole area of wealth transfer. Our clients have seen the reduction in Capital Gains Tax thresholds and the increase in the CGT rate, and seek out ways to avoid leaving their families with big tax bills. These tax bills can often result in families being forced to sell an inherited family home or other property, just to pay the tax bill. We help plan the transfer of this wealth in a tax efficient way.
The Drawdown years – age 65+
And now the spending years – hopefully! This is where you get to enjoy the fruits of your labour. Clients typically don’t have a salary (some have consultancy income) coming in at this stage, but of course we hope that we’ve been able to help them accumulate a good pension for themselves! Our work with clients who are in the latter stages of their lives tends to be around helping them manage their spending wisely. The risk these clients want to avoid is running out of money, so we help them to manage their assets carefully.
What we also see among this group is the amount of time they spend thinking about others and how important their legacy is to them. They are thinking a lot about their families in particular and how they can leave a lasting legacy (financial and otherwise) with them. Again we help them with their wealth transfer strategy to ensure their financial legacy is valuable and accessible for their families.
If you would like to discuss your own particular situation with us, we would of course be delighted to hear from you so why not reserve your free Discovery Meeting consultation today.