Our financial planning advice is tailored to suit your individual circumstances and future plans. However, there are common needs that arise at different stages of life.

Select the life stage relevant to you and read on!

The first step to building a strong financial future is making a budget and tracking your expenses. If you have debts to pay off, it is usually best to prioritise their repayment, and always avoid high interest borrowing facilities. Setting a disciplined approach in early life pays dividends over the long term.

You should start putting money aside for your future, the best way to do this is to take advantage of any pension scheme your employer offers (you get income tax relief at your highest marginal rate and often matching employer contributions). You may want to take advantage of ISA contribution allowances to build up a tax efficient savings pot.

When reliance on your own human capital is high and your asset base is low, unforeseen events or unfortunate circumstances can leave you with no assets and no ability to earn money. This is a significant risk for clients in the accumulation phase of their lives. It is important to hold insurance to cover you in the event you are unable to continue working. If you have any dependants such as a partner or children, you should also consider taking out life insurance to protect them should anything happen to you.

In summary, important steps during your early career years:

  1. Live within your means.
  2. Protect yourself and your dependents from future risks.
  3. Avoid taking on debt to meet short term needs and avoid high interest rate debts.
  4. Prioritise repayment of any outstanding debts.
  5. Build savings and establish a good credit history.
  6. Start taking actions for your future benefit

An independent financial planner can help you leverage an early start when planning for the future, the more time you have on your side the bigger the impact of actions you take today. They can also ensure you and your loved ones are protected if the worst happens.

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If you are like most people, you will find yourself taking on more responsibilities as you move through the accumulation phase of your life. The purchase of your first home, getting married and having children are good examples of major life events that can have a big impact on your priorities, needs and objectives moving forward.

If you marry and start a family, care should be taken to ensure you and your partner have appropriate protection in place in case of death, critical illness or inability to work. You should also make sure you have Wills in place to reflect your wishes on death.

It is important to keep sufficient cash deposits on hand to meet your needs in the event of an unforeseen event or emergency, such as home repairs or unexpected bills.

You should consider starting to build a savings pot or legacy for your children as soon as they are born, any funds invested in the early years carry the benefits associated with a longer term of investment. It pays to compound returns over additional years of investment.

You may find yourself progressing up the career ladder and enjoying higher levels of earnings, this presents financial planning opportunities to help you maximise the fruits of your labour.

You should make the most of reliefs, such as income tax relieved pension contributions, and limits such as your Individual Savings Account (ISA) contribution limits.

It is important you continue to put away money for the future as your earnings increase and you get closer to retirement. The tax benefits associated with pension contributions and any matching contributions offered under employer pension schemes can be employed to greater effect as earnings rise.

In this life stage, typical client needs include:

  1. Maintaining appropriate protection in case of death, critical illness or inability to work.
  2. Making use of reliefs and allowances as income rises.
  3. Increasing focus on retirement savings.
  4. Use of savings and investments to build accessible wealth.

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As you approach the end of your working life your ability to earn money is likely to be at its peak, you will start to think about making the transition from spending income earned through employment to deriving an income from your existing asset base.

You will start to have a clear picture of what you want your retirement to look like, how you will spend your time, what hobbies and interests you will pursue, any one off lump sum spending needs you may have, and so on.

In the run up to retirement it is important you understand what income and lump sums are realistically achievable and where feasible, take the opportunity to address any potential shortfalls by making further contributions to your pensions and investments while you are still working.

A key priority at this time is to ensure you are able to repay any mortgage you have on your main residence, plans should be in place to clear the mortgage in advance of, or on retirement. Maintaining mortgage repayments into retirement presents significant risks, the monthly repayments will eat into your retirement income, and if interest rates rise, you could be faced with material reductions to your living standards.

If you are approaching retirement in a strong financial position, then it may be time to start thinking about legacy planning and gifting wealth to your loved ones. You may also want to consider putting in place provisions for any potential long term care needs that may arise in later years.

In this life stage, typical client needs include:

  1. Become debt free prior to retirement.
  2. Continue to make use of tax reliefs and allowances to maximise the net benefit of both your income and your savings and investments.
  3. Think about what you want your retirement to look like, for many people, expenditure is higher in the early years, what do you want to do, when do you want to do it?
  4. Understand what can be achieved with your existing asset base and look to identify and remedy any potential shortfalls before you finish working.
  5. For those in a strong position, start to think about legacy planning and gifting wealth. Many people take great pleasure in seeing their loved ones benefit from gifts made during their lifetimes.
  6. Putting in place plans to meet potential future long term care costs.

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After you retire, your existing asset base has to provide for your needs for the remainder of your life. Your investment portfolio and income sources must be managed carefully to ensure your ongoing needs are met on a tax efficient and sustainable basis, regular reviews with your financial adviser are essential to ensure you stay on track.

The focus at this stage is to enjoy life, particularly in early retirement, while you are still fit and healthy enough to enjoy active pursuits like travel and outdoor hobbies.

If you have a large estate and have not done so already, you should put planning in place as soon as possible to reduce inheritance tax exposure. Estate planning is a complex area and there are many different options available, each with their own benefits and drawbacks. Knowing which option is right for you will require detailed consideration with the help of your financial adviser. You should also ensure your Will is up to date to reflect your most recent wishes and consider putting in place a Lasting Power of Attorney in case you are unable to manage your affairs in later life.

Gifting money is one of the easiest ways to reduce inheritance tax, and financial gifts from parents or grandparents can make a huge difference to the recipient’s quality of life and future prospects. Many people prefer to give gifts during their lifetime so their loved ones can benefit sooner rather than later.

You may also want to consider provisioning for any potential long term care needs that may arise.

In this life stage, typical client needs include:

  1. Careful management of your investment portfolio to ensure sustainability and tax efficiency.
  2. Reviewing your estate planning to mitigate inheritance tax.
  3. Make sure your Will reflects your current wishes and consider arranging a power of attorney.
  4. Provisioning for long term care.

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