This is when the crunch comes. You may be planning for children, moving up the property ladder, saving for or paying school fees and juggling with the costs of life in general. So, where do you begin?
A good start is to consolidate your finances by siftinig through loans, credit cards, investments and insurance policies and taking stock of what you have. Typically, the order of priorities for this age group is protection, pension planning and then investments.
The first consideration is life insurance. If you were to die without adequeate life insurance cover, would your dependants suffer financially? We can make sure that you have the correct level of cover for your specific needs. Have you sufficient critical illness cover and income protection cover should you fall ill for an extended time? Do you require private medical insurance? Your employer may already offer you some of these benefits, but we can help you fill in any gaps. Alternatively, if you are self-employed, you should definitely protect yourself from the potential loss of income caused by a period of serious illness. Please talk to us if you have any concerns.
Pension provision will typically follow once you have made sure that you have a secure protection foundation. But how big a pension do you need to enable you to retire comforably? We can show you what provision you should be making today to generate a fund sufficient to provide your desired level of income at retirement.
Your final consideration is long-term investing. Long-term investments can help you fill the gaps left by an inadequate pension. The options availale to you are numerous and much will depend on your tax position, attitude to investment risk and current arrangements. We can asist you indepedently to implement the right investment strategy for your specific needs.
If you've timed it right, your pension nest egg will be well on the way to its targeted maturity, your mortgage will be apid off and your children will be entering the working world and off your balance sheet. Unfortunately, if you have not planned sufficiently, you could be facing retirement with an income shortfall. If you are approaching retirement with only your state pension and a small pension fund, there are still steps you can take but you should talk to us immediately.
There's no escaping the fact that you will probably have to invest as much as you can afford to compensate for earlier inactivity. If you are in full-time employment, are you a member of your employer's pension scheme? How much you can contribute will depend on the type of scheme. This will be inclusive of any contributions you are required to pay asa a condition of membership of the scheme and any AVC/FSAVC contributions.
Also, don't neglect the possibilities of ISAs, which allow you to invest up to £7,000 tax-efficiently each tax year in cash, life insurance or stocks and shares within certain limits. Finally, if you are a homeowner, you could take advantage of the equity that you hold in your property by releasing some of it, or selling it and then downsizing to a smaller home to generate more income.
Wherever you are on the financial planning life cycle, if you would like us to review your current situation, please contact e-mail or contact us for an assessment so that we can help you fill in any gaps.
Levels and bases of, and reliefs from, taxation are subject to change.
