Our clients / Hilary and Paul

A woman and her friend dealing with dementia

The challenge

Hilary, 69, has early stage dementia and no family. She has granted her friend Paul power of attorney to look after her finances and wellbeing as her capacity to do so diminishes. Looking at Hilary's finances, Paul had seen that she had a number of investments valuing £400,000, was confused by what they were and worried by the capital movements and charges that he saw happening.

Through discussions with both Hilary and Paul we built a full picture of Hilary's finances and situation. Two factors were particularly significant: the fact Hilary currently spent a lot more than she received in income, and that she wanted to stay in her own home for as long as possible.

Our solution

Hilary's existing investments were reviewed and nothing was amiss regarding the capital movements. However, changes did need to be made to her portfolio: it was overly complex and tax inefficient, charges were high and the risks taken unsuitable.

Two cash-deposit accounts were set up to manage Hilary’s cash needs: one for everyday expenses, and in another account with a higher interest rate, a larger cash sum that could be drawn on to top up the first account as required. We also created a cheaper and simpler investment portfolio that Paul could more easily understand, and which creates an income that feeds into Hilary's top-up cash account with the higher interest rate. Full use of Hilary’s annual Individual Savings Account (ISA) allowance has been used, and will be each and every year, making more and more of her income and gains tax free.

The benefits

When she looks in her everyday cash account Hilary always sees she has money, and so has peace of mind. Her effective rate of tax has lowered from 20 per cent to 12.2 per cent. If Hilary needed long-term care in her own home from today, her liquid capital would last for a further 18 years – which is six years longer than it would have done before she and Paul sought our advice. And if no care is ever needed then Hilary will have liquid capital until she’s almost 100 years old.

Further case studies

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