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Archive for April, 2020

How to Build a Long-Term Financial Plan
How to create a financial plan

This a great time to review your financial situation and build a long-term financial plan. Do you want to know how to build a long term financial plan? If you follow the steps in this guide you will be in great shape to achieve your future goals but more than that, you’ll be in great shape to survive the next financial crisis!


A successful financial plan will require you to take the following steps:

Set Financial Goals

Sit down and write down your financial goals you want to achieve going forward.  What do you want to do, when do you want to do and how much will it cost?  It’s important to cost this up and £ specific terms.  You can split your goals into short term (next 5 years) medium term (5-15 years) and long term 15 years +.

It’s important to write these down and share this with those close to you such as family and friends so that they become involved and increase the chances your stay on track with the plan.  It’s also important to review them at least yearly so that you can update the cost with inflation and adjust accordingly.

Set Up a Savings Plan to Achieve Your Goals

 It’s important to set up a savings plan to achieve the goals you have set and stick to it in a disciplined structure.  For short term goals setting up a savings account  would be advisable to avoid short term stock market falls.  For your medium- and long-term goals investing in the markets on  monthly basis is a great way to help your savings keep ahead of inflation.  It can be tempting to stop saving during times of stock market falls, but this is the time to keep it going if affordable as your monthly contribution buys cheaper units – it’s a bit like going the sales.

Before you set up your savings plan there are some actions below which are important to put in place so that your financial plan does not come off the rails:

  • Ensure you have adequately protected your income with income protection insurance
  • Pay off any high interest debt such as credit or store card balances – there is no point trying to save and earning a return of 5%-6%pa, if you are paying debt interest of 20%+ at the same time
  • Ensure you have enough life insurance in place to pay off any secured mortgage debt and cover dependents financial needs should the worst happen
  • Have a contingency fund set up with 3 months expenditure sat in an instant access account so that you available funds for emergencies such as a major capital expense with your car or home or funds to see you through loosing your job and finding the next one

Set up an action plan to complete the above steps and take it a step at a time.  You will be able to complete all the tasks above immediately.  But gradually over a period of time you can implement a really successful plan that will make you more at ease with your financial situation.

We specialise in helping clients set up their own financial plan and review it regularly.  If you would like any help or advice on setting up a financial plan, please contact us.


Investment values and income from them can go down as well as up, investors may get back less than their original investment.  Companion Financial Planning LLP is authorised and regulated by the Financial Conduct Authority; registration number 705850.

Tax Efficient Saving Options for Children
Father and child putting coin into piggy bank. Education of children in financial literacy

For those in a fortunate position to be able to start saving for their children there a number of options that enable any interest received or investment returns to be received tax free.  Firstly, it is possible to keep things very simple and just open a bank or savings account in the child’s name and then add lump sums or set up a regular monthly savings plan.  Parents should be aware that if interest received from the account goes above £100 per year the parent could be liable to tax at their own rate of tax.  This rule would only apply if the parent’s personal savings allowance is exceeded.  Grandparents, other relatives and friends are not subject to this tax rule.

There are other options which are available which can help with this issue:


Junior Individual Savings Accounts (JISA’s)

These can be set up for children by parents guardians and grandparents etc. and can save up to £9,000 per tax year into these accounts.  The money can be held in cash accounts to receive interest or can be invested in stocks and shares and potentially receive investment growth.  Interest and investment growth are totally free of savings and capital gains tax.  The accounts are set up by the parent or guardian and are held until the child is 18.  The child can take over control at age 16 and will get full access to the accounts at age 18.  While these seem a great idea for saving for higher education remember the child will get access to the funds legally at age 18 whether the parent or guardian wants this or not!  If the funds are not drawn at 18 the JISA turns into an adult ISA at 18.


Child Trust Funds (CTF’s)

These accounts where the predecessors to JISA’s.  They have all the same rules as above in terms of contribution amounts and tax breaks.  They are no longer available to set up now, but many still exist and will continue until the child turns 18.  When these where first introduced in the early 2000’s parents or guardians received a cash boost from the government as an incentive to set up.  These are no longer available, but it is still possible to get money from the government towards a child’s saving in the form of a pension…



This may seem strange, but you can set up a pension for a child and it makes very good sense to do so taking a long-term approach.  As with the initial CTF’s mentioned above the government gives tax relief as an incentive to pay into a pension for a child.  So, if a parent was to pay £100 into a pension for their child the government would add £25 to the fund in the form of tax relief.  The rules for how much can be contributed are tighter than the JISA and the CTF.  As the child is unlikely to be earning money contributions are limited to £2,880pa.  The government will add £720 to this to make the total gross contribution £3,600.  Again parents, grandparents and other third parties are able to contribute.

But remember the government wants the pension holder to use this for their retirement so access is not allowed until age 55 and in 2028 this is likely to be increased to 58 and will stay within 10 years of state pension age going forward.  So, the money is locked away for a long time!


Tax Exempt Savings Plan’s (TESP’s)

 These can also be set up for children and again any interest or investment returns are tax free provided the account are held for at least 10 years.  £25 per month or £270 per year can be saved into these accounts.


So there a number of different options available and tax allowances to take advantage of.  It is just important to make sure you understand the rules for each type of account before setting up.  If you would like to talk to us about this area of financial planning please contact us via the website contact option or / 01937 326013.


Investment values and income from them can go down as well as up, investors may get back less than their original investment.  Companion Financial Planning LLP is authorised and regulated by the Financial Conduct Authority; registration number 705850.