A long-standing client of mine referred David to me.
David lives in Leicester with his wife, Mary, who, unfortunately suffers from a disability which makes walking, and especially climbing the stairs, difficult. In fact, Mary’s disability had progressed to a point where she was now sleeping downstairs and relying heavily on David for her mobility.
As he still worked that was a problem.
David was keen to help give Mary some of her independence back, which would allow him to continue working in a job he still enjoyed.
However, David and Mary have little in the way of savings. Although David did have some pensions.
They approached me for financial advice, which I was happy to provide.
How I helped
The obvious answer would have been to use existing savings, and investments, to pay for the modifications David and Mary needed to make to their home. However, this was not possible.
David though, did have a large Final Salary pension, as well as several other Personal Pensions.
I spent time with David and Mary discussing their objectives and how they saw their retirement. Once I had done that, I was able to analyse their income requirements over the short, medium and long term. It soon became apparent that when the State Pension and David’s Final Salary pension were combined, they would have sufficient income in retirement to meet their needs. Furthermore, and very importantly, we concluded that should David unfortunately die before Mary, she would still have sufficient income to pay for the care she would need.
This exercise means we could confidently use the tax-free lump sum from the Personal Pensions to modify their home.
What did my financial advice achieve?
By using my knowledge and expertise, as well as taking advantage of the new Pension Freedom rules, I could help David and Mary in several different ways.
Firstly, my advice gave Mary some of her independence back, while allowing David to continue working.
Secondly, and equally importantly, David and Mary could spend the money on their home, safe in the knowledge that it would not be financially harmful to their retirement.
Finally, Mary also now knows that if David were to die before she did, sufficient income would be available to meet the costs of care.