Financial Planning — Advice Sought

Marchitiello

bpk101 said:

eskbanker said:

bpk101 said:
Our joint income is around £330k including bonuses with my OH's income accounting for about 70% of that

Is that a typo?  Struggling to understand why you'd need to shift to a low-repayment mortgage to free up cash if that's the level of income that's involved, and likewise it doesn't sound right that you'd be earning about £100K but without making any pension contributions?

No not a typo, and a large part of why i desperately want us to get on top of our finances. As you've rightly pointed out, the amount we collectively earn doesn't justify some of the financial choices we've made (low-repayment mortgage etc.)

I think we both need to sit down with a moderator who can help my OH and i plan our finances better based on sound professional advice. Our understanding of what we earn and how we can best manage that income is escaping us. We have no real financial planning in place or any sort of system for budgeting, saving, investing etc (other than the aforementioned ISA's and JISA's). 

In terms of my own lack of a pension, i work in the creative industry and have been self-employed for many years now. The importance of a pension or any sort of financial advice or direction towards one is something i've never been overly-exposed to and time has just drifted by. 

Are these areas i mentioned the sorts of things an FA can help and advise on and is the cost of using one justified in my case? 

With your joint level of income you should have access to some entry level private banks that could have already helped you make better decisions simply with the products available to them (which is often not a good thing from Private arms of High Street Banks, but proper boutique /smaller Private banks have better service and options) although an IFA would have been the ultimate goal. You should be really maximising on all the tax saving investments and saving scheme out there, including Pensions, ISA, etc as well as getting a better mortgage deal.

bpk101

enthusiasticsaver said:

Why do you not have a pension?  Does your employer not offer one? Is your OH sitting on lots of savings if she earns a lot more than you?  Do either of you have debt? 

I've been self-employed for the last 6-7 years and prior to that the company i was employed at didn't offer a pension scheme or any sort of advice on starting one. Unlike my OH and many other friends who work in more corporate settings, there just doesn't seem to be the same level of employer benefits and financial support available in the creative sector i work in.

OH is sitting on approx. £120k of savings, currently languishing in low interest saver accounts though. 

Neither of us have debt. 

bpk101

enthusiasticsaver said:

Check out unbiased.com for an IFA.  You definitely need to address your lack of a pension and I would be looking to move to full repayment mortgage too.  You have very good incomes so you should be maximising pensions, stocks and shares isas. 

I spoke with an IFA briefly last week through VouchedFor (similar to Unbiased i believe) and have a free 30min-1hour consultation lined up this week. From the initial details i shared with him though he was of the same opinion that lack of pension and moving back to a repayment mortgage were paramount. 

He also flagged up a lack of life / mortgage insurance, my OH has life assurance through her work but he discounted this as it's tied to her job and therefore not a guarantee if she were to change jobs. 

Any advice on what to expect or what to watch out for with one of these free IFA 'financial health check' consultations? 

Albermarle

bpk101 said:

enthusiasticsaver said:

Check out unbiased.com for an IFA.  You definitely need to address your lack of a pension and I would be looking to move to full repayment mortgage too.  You have very good incomes so you should be maximising pensions, stocks and shares isas. 

I spoke with an IFA briefly last week through VouchedFor (similar to Unbiased i believe) and have a free 30min-1hour consultation lined up this week. From the initial details i shared with him though he was of the same opinion that lack of pension and moving back to a repayment mortgage were paramount. 

He also flagged up a lack of life / mortgage insurance, my OH has life assurance through her work but he discounted this as it's tied to her job and therefore not a guarantee if she were to change jobs. 

Any advice on what to expect or what to watch out for with one of these free IFA 'financial health check' consultations? 

It is partly a 'get to know you' session. I.e will you be able to work together as you need a reasonably good personal relationship for it to work well. You will not get any advice as such , just a general char around what might be possible.
After that they should make you a proposal including detailed and clear charging ideas.

To follow up another detail you supplied that your OH should eventually have pension of £800K . It sounds a lot, but if it is to last her a lifetime then the kind of income she could draw from it would only be around £30K pa . A big drop from £200K .....

Brie

Sounds like the OH might work for a large company perhaps?  (only going by the salary)  I suggest that enquiries be made if there's any inhouse advice for employees.  My employer offers sessions on financial planning basics and on specific topics.  Additionally there is a industry wide organisation I or my OH could contact for a variety of advice as well - all free and impartial.  

Re the work's pension.....yes it's possible to do better if you are financially savvy but it doesn't sound like either of you really are (yet!).  The best thing about a work pension is that costs are shared and very often the employer is also contributing a portion.  I'd be considering pensions in addition to the work scheme for her as well as something for yourself given you are self employed.  And never assume what the benefit statements show will be sufficient - if you don't understand what you are looking at you may be very wrong about what they are saying (been there, done that!)

enthusiasticsaver

From the sound of it then the OH is set up well for pension and has a lot of savings.  Has she looked at Stocks and Shares ISas or possibly overpaying the mortgage?  You need to prioritise a pension for you. If you are SE pension payments are tax efficient.