4 minute read
interviews with the region’s professionals WEALTH MANAGEMENT Financial planning advice for key stages of life
THE GENERATION GAIN
4eading Cardiff experts advise on the ages and stages of good financial planning for a healthy, wealthy life
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s you go through different stages of life, your financial goals are likely to evolve and alter. What’s right for you when you start working may change if you start a family. Teenagers may worry more about paying for their education, while those about to retire could be thinking pensions and wills. Here, we ask a few of the city’s leading financial firms to focus on some of life’s key stages and offer their advice.
Stuart d’Ivry, director,
independent Ånancial advisor, and pension transfer specialist at 8ure ?ealth Management
BIRTH “Children and grandchildren often create conversations around finances and long term savings plans. You may think it’s too early, but saving money into your newborn’s pension can result in an attractive tax benefit. Placing 2,88 into a pension will immediately benefit from £720 tax relief from HMRC. If savings access is required from age 18, then a junior ISA may be more suitable. It is possible to save up to £4,368 each year into a junior ISA. These allow a tax-free environment for savings to grow. The allowance is an annual one, so it is a case of use it or lose it.”
TEENS AND YOUNG ADULTS “With the maximum annual tuition fee rising to over £9,000, it is more important than ever to start putting money away and saving for children’s university costs. Although your children may not be earning any income, they still have their personal annual income allowance of 2,5. Smart financial structuring could utilise this ensuring that you won’t need to pay unneeded tax on your investments to pay for this added expense. If your child has had full contributions of £4,368 into a junior ISA since birth, every year until age 18, then this investment based on a net growth rate of 4 per cent pa could be worth in excess of £114,000 at age 18. What a lovely deposit for a first house!º
Craig 8alfrey,
EARLY ADULTHOOD ¹Once your children are no longer financially reliant on you, you can start putting as much as possible into your ‘Future You’ fund. We all want to help our children, but not enough people look after themselves first. The Bank of Mum and Dad is one of the Top 10 lenders of money for houses in the UK nowadays. We hope you can help your children, but make sure you help yourself first by maximising all tax reliefs and free money available. Penguin has released a video on The Bank of Mum and Dad to help, which you can watch on our Penguin 4egal YouTube channel.º
It’s never too late to start financial planning
MIDDLE AGED “The best £1 you will ever save is when you’re born as it has the most time to grow – the next best time to save that is right now. Putting your money into a pension is a great way to ensure that your wealth is continuing to grow somewhere you’re not able to touch it. Be aware that the later you start paying into a pension, the harder it’ll be to live off when you finally reach your »Financial Freedom’ date. Make sure you’re also aware of the maximum contribution, and find out how much employers will match your contribution – you could be missing out on ‘free money’ if you’re not already doing this.”
Aaron Hawkins, director and chartered Ånancial planner at HawSinsThomas ?ealth Management
APPROACHING RETIREMENT “Financial planning is not really about products, investments and tax wrappers, it’s about people. And when we’re looking at families, a financial plan is no matter for
the lone ranger. Each plan intersects with the others, and so every member of the family should take part in the discussion. For example, Andrew, aged 55, is the only son of Michael, see below. Andrew is currently employed and fast approaching retirement. There are a number of planning ideas and opportunities that someone around the age of 55 might want to consider: Do they have a retirement forecast plan? Can they afford to retire when they would like? Do they need to make changes to contributions or funds? Are they fully utilising their ISA on an annual basis? Are all allowances and exemptions being used? Can they afford to help their children and grandchildren? If so, how can they do this whilst protecting funds?”
RETIRED Michael, he is 80-year-old man, fairly wealthy, who has been retired for a number of years. Does he have a lifetime plan for inheritance tax using cashflow modelling? Can he afford to make gifts? How should trusts be used? Does he have an updated tax eٻcient will and a full power of attorney? Are all inheritance tax allowances and exemptions being utilised? How is long-term care to be funded should it be required in the future?”
