The clients
Alan and Catherine came to us looking for advice on their pensions.
They were both in their early 40s and had three children (all of which were in school). Catherine had recently returned to work; both were self-employed and, until now, hadn’t done much about saving for retirement. However, they had managed to save a decent emergency fund of approximately £20,000.
During our initial conversations, we discovered that the couple were concerned about providing for the family in the event of disaster. They had a joint life assurance policy to take care of the mortgage if one of them died, but they were concerned that this would still leave the surviving spouse struggling to make ends meet while looking after the children.
What we did
Firstly, we looked at protecting the family against disaster. After discussing the available options and analysing where the key risks to them were, we settled on a family income benefit policy that would pay the surviving spouse a regular income until the youngest child was 21. We also secured income protection policies for each of them so that, if they are unable to work due to accident or sickness, they would receive 50% of their normal income until they were 60 (after an initial waiting period of six months, during which time they could fall back on their savings).
Next, we considered what a successful retirement would look like to them and what age they might like to retire from. It’s never easy when you’re over 20 years away, but we agreed on something to aim for and will revisit and review the target regularly. From this, we created a plan for regular pension contributions. We spent a long time explaining investment risk to them and agreeing a risk profile for their pension investments.
Finally, we put the plan in action and got everything set up for them.
The results
Alan and Catherine were visibly relieved to finally have peace of mind; they now feel much more secure with their finances. They now understand how their pensions are working for them and can concentrate on enjoying life with the children.
We conduct a telephone-based review with Alan and Catherine every year to catch up, make sure our recommendations are still suitable and see if their circumstances have changed at all.
Every three years they come into the office for a more detailed check-up and we revisit the overall plan to see if they are still on course and adjust if needed.
