How everything has changed ! When I first started my career, in the late 80's, it was in life assurance sales, we weren't consultants, we weren't advisers and neither we were financial planners or wealth managers. We were sales people. It was sales that counted and our managers said the best route to a close, and to have the client signing on the dotted line was to disturb. To create the fear factor. I don't think I was tremendously good at following the party line.
I wanted people to buy from me because I was nice. However, as life and my career has gone on, I' have realised that those stories designed to disturb are rooted in someone's real life experience. So as we go into Hallowe'en here's a belated attempt to disturb you into taking action.
1. If you waited until you are 35 to make the same pension contribution you could have made at age 25, your pension fund at state retirement age will be 67% lower.
2. If you are a 53 year old, you have 168 months before reaching state retirement age and if you want to quit working that's 168 pay packets or salary slips to get as much saved as possible.
3. It costs £154,400 to raise a child to the age of eighteen. Add on a further £47,000 if you want to help them through university. How would your children fair financially if they lost your income and how would that effect their future ?
4. £31,627 per annum is the value of a Mum if she was to go on the payroll. £23,971 per annum the value of a Dad and £23,946 the value of the annual amount of domestic work a parent does around the home.
5. 61% of Dads own life assurance and 51% of Mums own life assurance. Only 13% of parents own income protection and when asked 49% of parents didn't know how long their savings would last if they lost their income due to ill health or disability. If you lost your income through ill health, how would your lifestyle be effected and what plans would you have to cancel ?
6. It is estimated by the government that total receipts for inheritance tax will be £3.3 billion for the tax year 2013 /2014. Less than 4% of estates had to pay inheritance tax and it is sometimes called the voluntary tax for the well advised but do you know what the impact would be on the beneficiaries of your hard earned wealth ?
7. There is no inheritance tax to pay on transfers between spouses and civil partners. Just because you own property ( bricks and mortar) jointly and one party dies it doesn't mean the survivor has no inheritance tax to pay. I see a lot of fathers and sons owning property jointly, mothers and daughters, fathers and daughters etc and where there is no spousal exemption the survivor is deemed to inherit the deceased's half of the property and this becomes assessable for inheritance tax, with the usual rules for the nil rate band applying.
Sources: The Cost of Delay in Pensions Calculator - Scottish Widows
The Value of a Parent 2013 Research - Legal and General
House of Commons Standard Note SN93 - Author Antony Seely - Parliament UK Briefings
Don't hesitate to get in touch if any one of those seven points has made you think and question your financial planning. Here to help.
Whilst reading the blog articles please be aware of the following:
Welcome to the blog curated by Jill Turner. The pages are not intended to give advice, they are just the real life stories from a real life financial planner and the wonderful people I get to meet.
I want the pages to be engaging, informative and purposeful.
The information contained within this blog is based on our understanding of current government proposals and tax
law, both are liable to change in the future.
Jill Turner is a member of the Personal Financial Society