children walking down a woodland path

Building a career and raising a family

Stage two

Lifecycle

Life events

  • The family moved house twice.
  • Susan was made a partner at the law firm she worked at.
  • Louise and David started school and went to university.
  • Paul returned to work as a teacher in his forties.

Considerations

  • Amending family protection.
  • Saving for school and university fees.
  • Maximising tax allowances.

How did we support Paul and Susan?

Susan’s career has taken off and Paul has decided to take a career break, staying at home to look after their two young children. With Susan now the sole breadwinner in the household, the family is reliant on her income to fund their day-to-day needs, as well as the funding required for future aspirations.

Paul and Susan needed to ensure they could provide for themselves and their children in the event that either of them was to die or become critically ill. They also wanted to provide a good start for their children by funding their school and university fees.

Amendments to financial protection

Paul and Susan are considering the financial consequences if Susan was to die or become unable to work due to an illness. Is there sufficient life insurance, income protection and critical illness cover in place to repay loans and meet normal expenditure needs? What would the financial implications be if Paul was to die? Although Paul is not bringing an income into the household, he plays a valuable role in looking after the children so that Susan can focus on her career. How much would it cost for Susan to employ a nanny to look after the children and allow Susan to continue with her career?

After reviewing their pension arrangements with their Crowe Financial Planning Consultant, Paul and Susan enhanced their protection insurances and arranged additional life assurance, critical illness and income protection utilising a Family Income Benefit plan. As independent financial advisers we were able to source the best products and provide that additional financial support through a relatively low cost solution to cover the children until they complete their education.

Saving for school fees

Paul and Susan are keen to support their children through secondary education and on into university. They are considering how much capital they will require to fund school and university fees and how this could be generated in a tax efficient manner, using all available allowances, including those available to the children.

Review of their tax position

As Paul is not working and has no income he is a non-taxpayer, whereas Susan is a higher rate tax payer. With this disparity in their tax positions, they should be considering the most tax efficient way in which they hold their savings and ensuring that Paul’s allowances are maximised where possible and taxes are minimised.

We highlighted the benefits and advantageous tax reliefs of saving into pension plans and how these monies could be used to generate a tax efficient income stream in retirement.

We advised them on an appropriate investment strategy and structure to help meet the future cost of the children’s school and university fees using cashflow modelling. This is to demonstrate how much they needed to save, how these monies should be invested and that the expected cost of funding the fees was achievable and affordable.

We advised on a tax efficient savings and investment strategy to make use of all personal allowances and ensured that the overall tax efficiency of their planning was optimised.

We agreed to review their planning, objectives and strategy annually to ensure that their plan remained appropriate for their circumstances so that they could stay on track to meet their objectives.

What did this mean for the Wells family?

Paul and Susan had peace of mind knowing that they would be financially secure and that their future plans would not be derailed by an unforeseen event.

They understood the actions that were required to fund the children’s education and were comfortable in the knowledge that, through stress testing possible scenarios using cashflow modelling, their objectives could be met and the funding was affordable and sustainable.

They now have a tax efficient savings strategy, making use of Paul’s non-tax payer status while he remained at home to look after the children. They made their money work harder for them by saving into pension plans and benefitting from Income Tax relief on their contributions.

Financial support throughout your life

Find out what each stage for Paul and Susan Wells brings ...

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The information set out above is for information purposes only and does not constitute advice to undertake a particular transaction. Appropriate professional advice should be taken on specific issues before any course of action is pursued.  Any advice provided by a Crowe Consultant will follow only after consideration of all aspects of our internal advice guidance.

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Our Financial Planning team

Our Financial Planning team, are independent financial advisors that, provides whole of market solutions advising high net worth individuals and families on their UK financial interests.

Our approach is to develop long-standing relationships with our clients built on trust and understanding. We invest significant time in understanding your financial affairs, your future objectives and aspirations.

Phil Smithyes
0118 959 7222
Thames Valley
Miles Clarke
0118 959 7222
Thames Valley
Adrian Crowe 
020 7842 7187
London
Richard Dean
01242 234421
Cheltenham
Stuart Elder 
0118 959 7222
Thames Valley
Aron-Gunningham
0118 959 7222
Thames Valley
Julian Hanrahan
01622 767676
Maidstone
Dharmesh-Upadhyaya  Dharmesh Upadhyaya
020 7842 7325
London