Our clients / Gayle and Hugh

Business owners reassessing their finances

The challenge

Gayle and Hugh are in their early fifties, run their own small business and thus work long hours and have a lot of demands on their time. When they first came to us, they hadn’t had the chance to look at their personal financial position for a number of years. They had a number of life insurance policies, pensions and investments, but weren't sure whether they were still needed. Should they get rid of some of their policies? Were their investments doing as well as they should?

Gayle and Hugh love working and think they will carry on with the business well into their seventies, but would like the option of being able to work three days a week from when they are 60 years old and yet know they can still afford to live well. The couple have one teenage son, and assets valued over £1.7 million. They don't mind paying inheritance tax, but would be happier if a bit more could go to their son after they are gone.

Our solution

We first discussed Gayle and Hugh's thoughts on how each of them would want to live in the event of the other partner being the first to die. With detailed analysis of this scenario in terms of lost income and changes to expenses, we could see that the couple had too much cover on their life insurance. As a result, one unnecessary policy was surrendered, saving Gayle and Hugh £22,183 in premiums over the life of the policy. Another policy was used to increase the amount that the couple's son would inherit, saving them £20,524 in inheritance tax and putting £51,310 more in their son's pocket – all without leaving them short of life cover in the event it was needed.

We then spent time ascertaining both Gayle and Hugh's goals and their attitudes to investment risk, looking at ‘worst case’ scenarios to ensure that these would not affect the chance of them living the life they wanted. In light of these conversations and the information we gathered on other aspects of the couple's current finances, we restructured their pensions and investments where needed to ensure they were going to provide the best return for the level of risk that they were comfortable with. We also reduced the costs of their portfolio and increased its tax efficiency.

Using sophisticated software we could show Gayle and Hugh a picture of their financial position, not just today but where they would be in five, ten and even 30 years' time. This projection demonstrated that they already had enough to be able to reduce their working hours from age 60, which was great news. We were also able to confirm that being business owners (and thus having overlapping personal and commercial finances), it remained tax efficient for Gayle and Hugh to continue to make contributions into a company pension.

The benefits

Taking into account savings in investment fees and reductions in both tax and insurance premiums, our initial work for Gayle and Hugh meant the family were around £500,000 better off than they had been before they came to see us. We've now worked with them for six years, during which time their net worth has increased by a further £2 million. They have consistently made savings on their income tax, passed on more capital to their son, and in total reduced their potential inheritance tax liability by over £450,000.

Gayle and Hugh could both afford to stop working today. They have the freedom, security and peace of mind to live how they choose to, and as we review their portfolio regularly and meet together at least once a year, we can adapt the couple's financial plan to meet any new circumstances or future goals, as they arise.

Further case studies

Young professional looking to retire early Couple needing to invest an inheritance wisely A woman and her friend dealing with dementia Couple wanting to ensure a comfortable retirement