Edward’s story



Edward’s a high earner who’s enjoyed a great lifestyle. He’s planning to retire in 10 to 15 years’ time and is keen to ensure that just because work stops, the fun doesn’t have to! Currently he earns £500,000 a year, has cash savings of £150,000 and ISAs, unit trusts and VCT investments worth about £1.2 million. He also has shares in his company of £200,000 and a pension pot of £500,000.

Edward’s long-term plan is to have accumulated between £1.5 million and £2 million in investments and pension by the time he’s ready to retire. He believes this is a good sum to ensure he can live the life he wants throughout his retirement years.

"I want to make sure I can live in the style I’ve become accustomed to, even after I retire."

How we helped

The problem for Edward is that, as a high earner, much of his wealth is at risk of disappearing in taxes. Once you earn more than £100k, you’re effectively paying 60% tax on a portion of your money. So our challenge was to help his income grow in the most tax-efficient way, taking into account Income Tax, Capital Gains Tax and Inheritance Tax. On top of this, he was also in danger of putting too much money into his pension and breaching his annual allowance. At this level, it becomes very limited as to what you can do to still get tax relief back.

We spent some time putting together cash modelling scenarios to help Edward understand what options were available to safeguard the money he was accumulating to fund his retirement.  Rather than carry on paying into his pension and having to pay the annual allowance tax charge, it seemed he’d be better off putting the money into alternative investments instead. We also suggested he could invest some money in his wife’s name and make the most of her personal allowance. Some of his money is now also being diverted to help his children, who are 10 and 12, build up their own investments for the future. As well as making sense to utilise their tax allowances, it’s the perfect way to give them a good start in life.

Ready to talk?

If you want to know more about getting the most out of your finances for your retirement, investing or estate planning, please get in touch. You can send us an email or use the direct message box at the bottom of this page. Or call us and we can chat through your needs and, if you are ready, make an appointment to better understand how we can help.