Business Owner Case Study
Clients early 40s, introduced via a solicitor to Family Business Owners, assets of £900,000 excluding pensions. Income approx. combined of £100,000 a year making minimal monthly savings.
Problem
They wanted to put a plan in place, but they were struggling to find an adviser to work with, as they felt they were always trying to sell them stuff.
They wanted to be able to make work optional at 60, but they didn't know where to start. They had various pensions which hadn't been looked at and weren't making contributions, so they wouldn't achieve this goal. They didn't know the best course of action.
Solution
We started by focusing on what they were actually trying to achieve, then built a financial plan around this. We look at how much need to contribute to making stopping at 60 a reality.
Once we had plan in place we look at existing pensions and investments see where they could be improved. We simplified their pensions by consolidating with one provider which was lower cost, started pension contributions and ensure they had a diversified portfolio.
We undertook tax planning within the business to see what savings could be made. Recommending a lump sum of £15,000 and regulars of £1,250 a month to pensions
Outcomes
Clients have a clear financial plan and understanding of what they need to do to achieve their goals.
Corporation tax bill reduced by £5,700 in year one. Over 20 years this would save over £100,000 in tax.
Personal tax relief of £12,000.
Contributions will add £300k to the pension pot at 60, assuming average growth rate of 7%.
Also reduced the costs of their pensions and investments.
Now that she has this plan in place, she will continue working with them on an ongoing basis: liaising with their accountant about how much needs to be put into the pension each month; reviewing investments as necessary; and recommending any changes based on changes in income from their business