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Rain or Shine, Seek Advice

How our advice helped Lawrence save on his tax bill and win big on a premium bond.

It’s important that you seek advice when you have a significant change in life circumstances, particularly if it has financial implications.

Fortunately, our client, Lawrence Stevens, did just that when his company, in which he owned shares, was bought out and he received £110,000.

At the time, Lawrence, 58, was making regular, personal contributions to his pension and earning tax relief on them. So, how should he use his windfall?

After discussing it with his Reeves Independent life stage team, he knew how to take action. The first thing he did was to repay a £10,000 loan, as the interest on that was almost certainly going to exceed any return he could make by investing the cash. Similarly, he repaid his £35,000 mortgage. Together, both these repayments significantly reduced his monthly outgoings.

He and his wife, Sharon, wanted to have easy access to funds as they wanted to be in a position to help their daughter, whose own children were approaching university age. So, we advised them to pay £20,000 into an ISA, which gives him tax free income and capital growth, and another £20,000 into a general investment account. This was money invested for growth but which is still easily accessible if required.

With remaining money, Lawrence and Sharon took a luxury cruise and, when they returned home, the used the balance to buy a premium bond. Lawrence was lucky enough to earn £10,000 from his premium bond.

So, by seeking and acting upon Reeves Independent's advice, Lawrence has been able to make the best use of his windfall, in a way that strengthens his financial position and which also leaves him and Sharon with the flexibility to be able to help their family.

This article is for information only and should not be seen as advice or a recommendation to take action. Investments can go down as well as up and you may not get back the original capital invested.

The case study is based on individual circumstances which may differ from your own.

Names have been changed for the purpose of this case study.

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