• Piggy Bank

    Wise Investment Plans

    No need to break the piggy bank savings, investing wisely can secure your future and your families, discuss with Forty One Consulting about the different investment options we have available.

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  • Pensions

    Retirement Options

    Retirement planning has always been complicated and, despite efforts to simplify matters in 2006, it unfortunately remains so. At Forty One Consulting we pride ourselves on making our clients more at ease with the complicated system to provide you with the best advice we can.

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  • Protection

    Protection

    Finding the right protection is difficult to do, at Forty One Consulting we can walk you through the different options and find the perfect protection plan to suit your needs.

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  • Frequently Asked Questions

    Frequently Asked Questions

    With the introduction of more flexible ways to access your Pension from April 2015, we are constantly being asked more questions.

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Case Studies

These Case Studies are to demonstrate how we can assist our clients. They are based on the individuals own particular circumstances and are not intended as advice. We recommend that you seek financial advice based on your own needs and circumstances before making any financial decisions.

Case Study - Jean

Jean became a client in 2004 and her concerns were whether she would have sufficient income in retirement in order to maintain the Standard of Living she currently enjoyed.

She was 54 at that time and was looking to retire in 2011 - 7 years time and at age 61 (her State Retirement Age). Being single with no dependents, her self sufficiency was a major concern for her. What help did we give?

Initially, there were several Pensions that she already had and she was contributing into a Personal Pension. All of her Pensions were reviewed as to performance, charges applied and ensuring that the relevant holdings were in line with her Attitude to Risk.

Her current expenditure was ascertained and it was determined that there were certain expenses she would no longer pay once she had retired - mortgage, travel expenses, etc.

We constructed a plan to achieve her goals. These included moving one Pension to a lower charging, more flexible arrangement; switching funds in another and obtaining a State Pension forecast.

Regular reviews were undertaken over the next few years and discussions took place as to any specific expenditure that was needed to fund that special holiday that she intended to have as soon as she no longer worked.

In the knowledge that we had a target figure to meet, she contributed slightly more into her Personal Pension on a regular basis and we worked towards her goal.

When Jean actually retired and the mortgage was paid off, her income from all her Pensions were sufficient to continue to enjoy the same living standards that she enjoyed - and in fact more monies to have even more holidays that she expected.

Now she is relaxed in the assurance that her income will be maintained at a level whereby she can do all those things she had her heart set on. With regular reviews, we look at the performance of her investments and she now has peace of mind to enjoy her well earned retirement.

Case Study - Niche Company

Being approached by an accountant that we work with, he asked if we could help save Corporation Tax for one of his clients who operated a niche specialised Company that had done so well, their anticipated Corporation tax would be in excess of £160K.

After meetings with the 3 Directors, we established a plan to invest in individual Pensions for each of them with regular premiums and a review prior to the Company year end to add additional funds if there was sufficient cash flow within the business at that time.

As the Company made the contributions, these allowable business expenses reduced the amount of Corporation Tax to be paid.

With regular reviews and adapting the individual plans on a bespoke basis to their individual goals and Risk, they now have peace of mind that at retirement their income needs will be met.

By conducting a full Financial Plan, we also considered the impact to the business if one of the Directors died or could not work for a long period of time - and arranged the necessary protection for these potential events.

Then the worse happened and one of the Directors was diagnosed with the big C!

At our next meeting with them all and the accountant, discussions took place as to what would happen to the business and the share holding of the doomed Director if this did happen. As we had arranged relevant life cover for each Director, it was ascertained that the cover was sufficient for the other Directors to claim and use the funds to pay the family for the Directors share of the business. An added advantage was that this would not be liable to tax.

The good news was, that with treatment, he is back to work and no need to claim - but it gave everyone the relief that the correct planning for this was in place.

Case Study - Malcolm

Having looked after Malcolm for several years with his future retirement needs and investments, his employment changed affecting his rate of tax and amount that could be put into his pension.

Through discussions, we recommended 'Salary Sacrifice' with the agreement of Malcolm's employer. Malcolm gave up part of his salary and, in return, his employer gave non-cash benefit that is exempt from tax and National Insurance.

Once he accepted salary sacrifice, his monthly income reduced, but as he no longer paid the Pension Contribution himself, there was an actual increase in real terms.

As his employer did not have to pay the Employers' National Insurance contributions, this saving was passed to Malcolm in the form of additional Pension contributions from the business, so he had more money paid into his Pension.

Case Study - Julie

I met with Julie when she was going through a Divorce. Her husband was employed with the Fire Service and had a highly paid position with them after 25 years of employment.

The assets are usually taken into consideration - including the value of the Pensions each have. Julie's was minimal as she had looked after their children for several years and had not worked.

His pension value was quoted by West Yorkshire Pension Fund to be £306,791 and the proposal was that she kept the house - valued at £200,000 and with a mortgage of &poud;110,000 - and he kept his pension intact.

By obtaining an Actuarial report, the benefits that he had accumulated during their marriage was revalued at £740,000 as the true value.

This dramatically changed the discussions with their lawyers and she proceeded more confidently with this knowledge.

Case Study - Richard

Richard and his wife owned a pub which had some land at the rear that was used as a Caravan Park. He wanted to apply for planning permission to develop this field for residential dwellings but was concerned about the amount of Capital Gains Tax that they would be liable for if he did this.

The first step was to separate the field from the pub with the Land Registry and as he had some pensions we transferred these into a SIPP (Self Invested Personal Pensions). He then used some of these funds (£25,000) to purchase the field through his Pension (which is allowable).

Then after obtaining planning permission for change of use, he sold this land onto a developer for £175,000. After all the charges he made £140,000 profit - TAX FREE as Capital Gains Tax is not paid by Pensions.

This meant that when he took his pension benefits, he could take 25% (£35,000) Tax Free and had further funds to provide him with an income once he retired.

Case Study - Elsie

Having looked after Tom and Elsie for several years, the funding into a pension for her was minimal as they concentrated on Tom's contributions.

The value being £19,000 - as at February 2014. After the budget announcement in March 2014, the Trivia rule changed to be that if the total of all one's Pensions was less than £30,000; an individual could take the entire amount out as a lump sum with 25% being tax free and the remainder being taxed at the 'marginal rate'.

As Elsie is 59, she can take benefits under the Trivia rules from age 60 - in 3 months time. These were the results:

Current Value £19,000 (rounded figures)
Less Tax Free Cash - £4,750
Remainder £14,250 -
Less tax at 20% (£2,850) £11,400
Net Total Paid Out - £16,150

WITH ADDITIONAL CONTRIBUTION OF £10,000 - £8,000 paid and tax relief of £2,000

Value £29,000  
Less Tax Free Cash - £7,250
Remainder £21,750 -
Less tax at 20% (£4,350) £17,400
Net Total Paid Out - £24,650

Thus an increase of £8,500 for payment of £8,000 within 3 months gave a return of 25% (6.25% for a 12 month period) without any investment growth.

Case Study - David

David, age 63, contacted us in October 2011 for a review of his pensions. He had just suffered a TIA and with had other health issues, so he wanted to stop working as soon as possible, but could he afford to.

Again, his current income and expenditure was considered alongside when he would be eligible for State Pension and how much this paid.

His dream was to travel to China and Alaska before he was unable to travel and we established how much monthly income was needed going forward. His current income gave him £1,600pm of which they saved £500pm.

He had 5 pensions totalling over £200,000. We reviewed each pension and one had 'Guaranteed Annuity Rates' and another had the option to take more than 25% of tax free cash.

By ensuring that we managed to get the best results with each pension plan - consolidating some and taking the enhanced Annuity rate with another.

His wife Wendy only received a State Pension of £28pw. Once Dave was in receipt of his State Pension, Wendy's State Pension as paid as a 'Married Persons' pension and increased to £64.40pw (rates for 2011/12).

The income was then:

  • Dave's State Pension at £135pw 7,020
  • Wendy's State Pension at £64.40pw 3,348
  • Guaranteed Annuity 3,142
  • Drawdown Pension 6,627
  • Total Gross Income £20,137p.a. £1,678pm

As well as this, he received almost £42,000 tax free from his pensions and used this money to easily fund his 2 holidays and give him an income for the 14 months until he received his State Pension.

Each time we meet to review his Pensions, he looks more relaxed and now spends time enjoying his grandchildren and his holidays. Without financial worries, his health has improved dramatically.

Case Study - Sylvia

Being introduced to Sylvia in 2004, I met with an elegant, very astute lady aged 70 who recently had been widowed.

She had a potential Inheritance Tax (IHT) liability on her total assets of £688,000 of £170,000 as at the time her Nil Rate Band allowance was £263,000. At this time, you could not use your late spouse allowance, if assets were left to the remaining spouse.

Her late husband had 2 grown up children and she herself had 3. The Will stated that she would inherit his assets in full, whilst she would prefer his children to inherit as well.

We recommended that she saw a solicitor to arrange a ‘Deed of Variation’ to amend his Will, making her more comfortable with how the assets would be divided. His children received part of his Estate. Then we reviewed her income and expenses and recommended options as to how she could mitigate this IHT potential liability.

These included gifting funds to the family, enjoying her wealth by spending on holidays and investing in various investments that are IHT exempt.

Regular reviews of her investments and discussing all aspects as her situation changes gives her peace of mind that she and the family benefit from the wealth accumulated through hard work and paying less tax in the future.