Although the following case study relates to an actual example, where we have helped our clients by providing solutions to their financial problems, the names and figures have been changed for confidentiality purposes.

Catriona’s background

Catriona had come to see Rachel as she had recently inherited some money which was now sat in a current account with her bank. Catriona was aware that this was not the bast place to leave the cash long term and knew her salary placed her firmly in the Advanced Rate of Income Tax. However she wasn’t sure what to do with it and found the world of investments and pensions mind boggling.

The planning process

As this was an inheritance Rachel was careful to ensure Catriona had the support she needed having lost a loved one. After ensuring Catriona was able and happy to have further conversations about the inheritance, Rachel established that Catriona’s main goal was to be able to retire early and pursue all the hobbies she had put on the side whilst working a demanding job. Rachel then found that Catriona still had unused pension allowance from previous tax years.

This was key information for Rachel as it is imperative to use tax allowances before they are lost – ‘use it or lose it’

Catriona’s final plan

The final plan was agreed and Catriona boosted her pension by £125,000 but this only effectively cost her just over £74,000 by using pension tax relief at her highest rate. Catriona also used some of her carry forward allowance thereby using previous tax years pension allowances which had been sitting unused waiting to be lost.

As well as the tax saving benefits of this plan Catriona’s inheritance is now in a tax efficient growth environment which will be managed for her to ensure the risk and reward is tailored to her preferences.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested. Equities do not provide the security of capital which is characteristic of a deposit with a bank or building society.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances. 

The advice provided to Catriona was given after a full evaluation of their specific needs, circumstances and requirements. The solutions provided would not be suitable for most investors and the information provided does not constitute advice.