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Advise on managing my finances and when to seek advice from an IFA?

25 February 2022

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Question by Ann

Advise on managing my finances and when to seek advice from an IFA?

I am 31 years old. I am a doctor and work for the NHS. I pay towards the NHS 2015 pension scheme. I bought my first house with my partner 2 years ago. We both own the house jointly. We have a shared savings account and keep separate current and personal savings accounts. We both have separate life cover [not critical care cover- I decided against this when weighing up pros and cons]. I am looking into income protection, although with the NHS they do provide certain number of months of FT pay based on how long your service to the NHS is.

We both pay into separate S&S ISA and Lifetime ISA on a monthly basis. We have monthly sit down meetings to go through our finances. This is mainly to just review our savings and spending - I keep an up to date spreadsheet of our credit card bills and how much we are saving. I would say that I am more financial motivated and interested than my partner. I manage my partner's S&S ISA and LISA. I have selected a range of funds [moderate to high risk] on Fidelity platform. He is comfortable with this and understands the element of risk associated with S&S.

My partner has around £50,000 in savings - £25,000 is in S&S. I have around £70,000 in savings - £35,000 in S&S. The rest of savings is in NSI bonds and an easy access saver. We don't intend on needing to withdraw from our S&S for at least 10-15 years [based on our current circumstances but appreciate these can change!]. We have no debt apart from student loan.

I am not sure when you seek advice from a IFA? I feel our pots in our S&S accounts are mounting up and it does makes a little apprehensive that I am just purely managing them, I have no financial education - just from self reading. The S&S funds fluctuate quite significantly as high risk funds. I don't have the urge to withdraw/ sell but I also don't know whether my portfolio is well diversified. I am also unsure whether to buy new funds and spread my money or continue to buy into the same funds.

My financial aim is to make the most out of my savings. We plan to have children in the future - perhaps 5 years and both would like to go LTFT. This would be a drop in salary. I would like to ensure that we are financial secure, have a good pension, be able to retire early. I have no intention to work until age 67!

Sorry for the rather lengthy message!

Ann


Answered by Adam Holt

Hi Ann,

Thanks for getting in touch and thank you for providing so much information. Boring Money have put you in touch with myself, as I am an independent financial adviser and may be able to help answer your question and provide you with advice if you wish to get in contact. First, I think you are doing fantastically well, and seem to be very much on top of your finances compared to the average person.

You ask when is the right time for financial advice? Well, there is no exact time and each to their own for when it is relevant for them. People get in touch as they may need help with setting up protection cover, mortgage advice or investing excess cash, inheritance tax planning pension planning etc. I can provide financial advice on the individual components, but where I think I can really add value for clients is looking at the overall financial picture and addressing the weaknesses and strengths. Using some clever cash flow planning tools, I can put in all this data into one system and look at what the future may entail if things were to stay the same or if you were to reduce your hours, increase your investments, have a child, retire earlier etc.

A few things we could look at together and explore:

Protection – Existing life cover, is this sum assured, term suitable for you. Is the policy placed intro trust? Income protection, you mention a potential need for this already, what would happen to you if you weren’t able to work?

Investments – Existing ISAs, are they diversified and invested alongside your appropriate risk level? Do you want to be managing this yourself or have the peace of mind knowing someone else is managing this for you in the background? Do you have enough of a cash buffer, could more be placed into investments to seek better long term returns?

Pensions – Will you have sufficient income in place at retirement? I believe the NHS 2015 Scheme has a normal pension age of 68, you have stated you don’t plan on working until then. Perhaps setting up a private pension to cover your income needs in the earlier years may be very suitable and also tax efficient.

Some initial talking points there, I would be happy to discuss further.
Adam