Young Family Case Study

"We are all faced with financial decisions and challenges throughout our life that can shape our family’s financial future."

Peter and Claire came to meet with us shortly after they got married. Peter was a Shareholder and Director in a recent business start up and Claire had recently started working as a GP in a local surgery. They owned their own house and had savings of £40,000 in Cash ISA's. Peter also had a small pension from previous employment.

Main Objectives

  • Both wanted advice on how to invest their £40,000 savings, and how to invest future savings, as they want to generate more return than bank interest rates.
  • They plan to move to a bigger house in the next 5 years.
  • Claire was worried about the implication of being off work due to illness as she is self-employed and would have no other income.

Recommendations

  • We recommended that both move their Cash ISA's to Stocks and Shares ISA to generate a 4-5% return per year. They also contributed their maximum ISA allowance for the year to the new stocks and shares ISA's
  • The MTS Investment team built a portfolio of investments that would meet their investment objectives, for their Pension and ISA portfolios.
  • These assets would be held on the MTS Wealth Investment Platform which allowed the clients access to view their portfolios.
  • We recommended Claire take out Income Protection to cover her in the event of illness or injury preventing her from working for a prolonged period of time. The cover was calculated on the basis of her current earnings and expenditure requirements.

1st Annual Review

At their annual review a year later Peter and Claire came back to discuss the performance of their investments and whether there had been any changes to their personal circumstances:

  • Firstly they had been given the news the Claire was expecting their first child.
  • They both wanted to discuss having something in place to provide for their family should either of them pass away prematurely.
  • They were pleased with the performance of their investments and wished to contribute the maximum amount to their Stocks and Shares ISA's again this year.
  • Peter's business was growing well and he also decided to begin contributing to his Pension.

Overall Summary- Year 3 Annual Review

Over the three year period that we have provided advice to Peter and Claire we have helped achieve the following:

  • Their savings were invested taking a balanced level of risk, and had provided 16% return
  • We began some initial pension saving but plan to increase this later when main expenses of children and mortgage had gone.
  • We ensure that their family was protected from the risk of death of either of them or the loss of Claire's income through illness.
  • We helped them decide on the best solution for funding the purchase of a new house and in the long term which option would result in the best financial outcome.