Julie, Sales executive - Pension Accumulation

Pension Accumulation Case Study

Julie is a sales executive and contacted us because she didn’t have any pension provision in place. She had chosen not to contribute to the group personal pensions scheme her previous employer had in place and although her new employer intended to set up a work place pension through the government’s NEST, (National Employment Savings Trust) she wanted to explore the possibility of contributing to both her employer’s NEST scheme and a private pension.

> PENSION PLANNING

In our initial free meeting we discussed Julie’s pension goals and timescales. In addition, Julie completed a risk questionnaire so we could ascertain her attitude to investment risk and capacity for loss. We also worked through a fact find so we had a thorough understanding of her financial circumstances.

> ACCUMULATION STRATEGY

We then formulated a pension accumulation strategy with Julie. We recommended that she set up a personal pension plan and invested part of her surplus income into a well-diversified multi-asset portfolio within her new pension account. A multi-asset portfolio is a diversified collection of different types of investments such as shares, bonds and property funds from different geographical locations, for example the UK, USA, Europe and Asia.

We explained that Julie’s pension contributions would benefit from tax relief at source, this means the value of her contributions would be grossed up. As Julie is a basic rate taxpayer and had already paid basic rate tax on her income from her employer, her new pension provider would claim back income tax at the basic 20 per cent rate from the government and add it to her pension pot.

> DETAILED REPORT

We presented our proposal to Julie in a detailed report. In the report we included information on the past performance of the investments we were recommending, the strengths and weakness of our proposed approach, information on the personal pension plan were recommending and most importantly a detailed breakdown of all of the costs involved in implementing our proposal.

Julie chose to proceed with our advice and having set up her personal plan and the investments sitting within her pension wrapper, we now manage the investments on an ongoing basis. This means that we watch over the performance of her investment funds and swap them when we believe it is necessary to do so. We also rebalance her portfolio in order to keep them in line with her attitudes to investment risk.

> PENSION ADVICE

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Disclaimer: these case studies are based on real cases but the names and exact circumstances have been changed for client confidentiality. They provide examples of the service we have offered previous clients and may not be suitable for you. Please speak to one of our advisers should you want guidance in any of these areas.

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