Stephen is an engineer with the RAF. Linda also works for the RAF but as a civilian worker. They both enjoy good salaries with Stephen being on the higher-rate tax borderline, while Linda is a basic rate taxpayer. With no children to worry about and secure incomes, the Wilkinsons say they are not risk-averse and are quite happy to take a long-term view with their investments. This is perhaps just a well given the current turmoil that we are experiencing across world stock markets.
The adviser: Graham Bates is chairman at Bates Investment Services, a national firm of independent financial advisers (01132955 955) or e- mail: infoatbatespic.co.uk.
The advice: The couple are quite right not to concern themselves too much with short-term stock market movements: share prices will fall and rise but the long-term benefits of equity investment are not in question.
One of the benefits of Stephen's employment with the Royal Air Force is that accommodation goes with the job and the couple live in quarters on the RAF base. The flipside of this particular coin is that Linda and Stephen have yet to buy their own home, something they plan to do in about five years from now.
Saving a large deposit is one of the Wilkinsons' main financial objectives over the next five years, as they hope to have at least pounds 60,000 to put towards the right property. A significant proportion of this capital is likely to come from savings, which Linda and Stephen have been salting away in PEPs over the past few years. One of the benefits of using PEPs is the flexibility they offer, which means they can realise the value of their investments at a time to suit them both.
However, it is important to be clear that equity-based PEPs are designed for a minimum of five years and should not be used as a home for short- term savings.
Linda has fully-funded her general PEPs for the past four years, at pounds 6,000 a year, including this one. She has UK and European investments with St James Place and a Gartmore PEP invested equally between its UK Smaller Companies and European Select Opportunities unit trusts.
Given the present economic outlook, it would be sensible for Linda to keep her investment strategy focused on the UK and European markets, rather than trying to look further afield. Stephen has invested in PEPs using regular monthly savings as well as lump sums. But he has picked only one fund manager, Perpetual, to look after his capital in each of the past five years.
Although his investment is spread across a range of funds (Income & Growth, High income, UK smaller Companies and European Growth) and despite the fact that the Perpetual is a highly respected PEP manager, Stephen should nevertheless choose another company for any future capital as it is generally unwise to rely too heavily on any one fund management group.
When ISAs are introduced next April, Linda and Stephen will be able to invest pounds 7,000 each in year one and pounds 5,000 thereafter. As with a PEP, an ISA will be simply the "wrapper" that provides the tax benefits. The majority of PEP managers will be offering ISAs using exactly the same funds as before.
As well as his PEP investments, Stephen also took a bit of a flyer buying shares to the value of pounds 2,000 in the Schroder Asia Pacific investment trust. Unfortunately, on a short- term view, the fund performance has been disastrous but to dump the stock now would be closing the door after the horse has bolted.
Stephen also has some "warrants" added to the Schroder Investment Trust. Warrants convey the right to buy a share in a company, at some future time, at a fixed "exercise price". The option may be taken up on specific "exercise dates", up to a final date when the option lapses and the warrant loses its value. Exercising the option becomes worthwhile when the exercise price plus the original cost of the warrant add up to less than the current market price of the share.
Saving for a secure retirement is very important to the Wilkinsons. Stephen is well catered for through his RAF scheme, but Linda has had to give the matter a little more thought.
Wisely, she has started to soak up her unused tax relief by making contributions against her earnings over the past six years (known as "carry forward") using a range of Equitable Life funds. However, the performance of several funds selected has not been good and Linda should seek advice on re-arranging the investment split.
This month she begins contributions to a new personal pension to which her employer will also add 2 per cent of her salary. There has been some discussion that the employer's contribution might rise to as much as 5 per cent if she was also to subscribe the same amount and Linda should accept such an arrangement if it is offered.
The couple have around pounds 10,000 in easy-access funds for holidays, bills and the unexpected. This might be a little on the high side, although it's better to be safe than sorry
In addition, both have TESSAs - another good move to keep returns out of reach of the taxman! On maturity, the capital from the TESSAs can be transferred to a TESSA-only ISA. However Linda and Stephen might wish to use this cash towards their first house purchase.
In many ways, Linda and Stephen are model financial planners with plenty of savings to fall back on. They have a well thought-out strategy based partly on advice taken, as well as using their own judgement. There is little doubt that if they are able to continue as they have been doing over the past few years, a poverty-stricken retirement will be the last thing Linda needs to worry about!