Planning for the future of a young family

Background

Thomas and Carla are married and work as a dentist and a doctor.

The couple both have large and sufficient guaranteed Final Salary pensions to provide for their retirement. They sought financial advice due to concerns about tax-efficiency, seeing as both their incomes are over £100,000 per year. They were also concerned about financing their children’s private education and potential university costs.

What did we do?

We got to know Thomas and Carla and discussed their worries, as well as their aspirations for the future.

Seeing as the couple have excess income, we recommended that they both maximise their annual ISA allowance and invest £20,000 each into stocks and shares ISAs, as well as investing in a portfolio of funds for long-term investment growth.

When planning for their son’s education, we recommended that Thomas and Carla invest in a regular premium offshore bond. Offshore bonds grow free of any tax and can be assigned to anyone over the age of 18.

With university fees at £30,000 per year, including living costs, we recommended that Thomas and Carla should invest £300 per month over 15 years. In 15 years’ time, this could be assigned to their son, who can encash segments; the gains should fall within their personal allowance and be tax-free.

The results

Thomas and Carla now feel much more confident after implementing a structured financial plan that focuses very much on preparation for the future.

Seeing as their pension funds are linked to their salary, there was little that could be done in terms of avoiding tax penalties. However, the couple is pleased with their new investment and savings structure; it will ensure that their money is working as hard as possible for them.