Wealth Check: 'We want to save for our kids and for retirement'

With a 19-year age gap between them, Wendy and John Harbutt from Cheltenham, Gloucestershire, find their financial goals differ somewhat.

Wendy, 37, runs her own company and is the director of a second company, while John, 56, an operations manager, is just eight years away from retirement. They have two children, aged five and two.

"John would like to have paid off the mortgage by the time he retires, and to have achieved an adequate pension by that time," says Wendy. "I want to provide for the children and their higher education."

The couple have a £100,000 offset mortgage at a rate of 6.35 per cent. "We have enough money to pay off the mortgage in full, but we haven't done that as it would leave us illiquid. We keep thinking of buying a second property to use the cash capital."

In the meantime, they are trying to overpay their mortgage by as much as they can each month. John has £8,000 in an ISA. The couple also have an endowment with Standard Life.

Both John and Wendy have several pension pots, but are concerned about their current pension provision. "We would like to get our pension saving in order, and to consider other means of providing an income for retirement – such as rental property," she says.

John has life insurance through his employer, but the couple have no other protection policies in place.

We asked three financial advisers for their suggestions: Keith Churchouse from Churchouse Financial Planning, Anna Sofat from AJS Wealth Management and Adrian Kidd from Mint Financial Services.

Case Notes: Wendy and John Harbutt, from Cheltenham

Income: £80,000 a year
Pension: Wendy has a personal pension with GE Life; John contributes 7 per cent to his company scheme
Savings: £90,000 in accounts with Barclays – offset against their mortgage
Investments: £8,000 in a stocks and shares ISA

SAVINGS

"The Harbutts are in a good position in that they have enough savings to cover their mortgage – and no other debts," says Sofat.

She recommends they open cash ISAs to maximise their tax-free allowances, and urges them to start saving for their children.

Sofat says that while the couple have an endowment policy maturing in 2021, they should review whether it's worth keeping it in its current form. " They might want to consider selling it or encashing it," she says.

But Churchouse says that when this policy matures in 14 years' time, it could be put towards university funding for their children.

Kidd adds that the couple should have received some Standard Life shares last year after the float of the company, and says this money could be used to pay off the rest of the mortgage.

PROPERTY

An offset mortgage is a "good way to keep your money liquid and in a tax-efficient manner," says Churchouse, adding that it is a "good strategy" to pay it off before John retires.

Kidd says the couple should look at the pros and cons of property investment, but that "many foreign property markets have low entry deposits, which could pay huge dividends over a 10-year time-frame".

Sofat says that if they sink all they have into buying another property, they are exposed to that one asset. She recommends instead that they build up a balanced investment portfolio that will have exposure to a number of assets, including equities.

PENSION

With so many pensions from previous employers, Churchouse recommends the couple make use of the Pension Tracing Service.

Sofat says that as John is approaching retirement, it is important for him to do a full review of what he has – and the income he expects them to provide.

He should order statements from the pensions providers, and also request information about his state pension by completing a BR19 form.

PROTECTION

As Wendy has her own business, and the couple have two young children, income protection is essential, as a loss of income could seriously scupper their plans in the future, warns Sofat.

"It is important for John to investigate what benefits he is entitled to at work," she says. "Check what would happen to John's income if he became too ill to work."

To find an independent financial adviser in your area, visit www.unbiased.co.uk

For a free financial check-up, write to Wealth Check, 'The Independent', 191 Marsh Wall, London E14 9RS, or e-mail cash@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Neil Pavier: Management Accountant

    £45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

    Sheridan Maine: Commercial Accountant

    £45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

    Laura Norton: Project Accountant

    £50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

    Day In a Page

    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
    Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

    Laughter, but no tears, as Letterman takes his bow after 33 years

    Veteran talkshow host steps down to plaudits from four presidents
    Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

    Hozier's 'blasphemous' song takes Novello award

    Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
    Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

    Join the tequila gold rush

    The spirit has gone from a cheap shot to a multi-billion pound product
    12 best statement wallpapers

    12 best statement wallpapers

    Make an impact and transform a room with a conversation-starting pattern
    Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

    Paul Scholes column

    Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?