Our clients / David and Sue

Couple needing to invest an inheritance wisely

The challenge

David and Sue had received an unexpected lump-sum inheritance of £300,000. They'd never had such a large amount of money at their disposal before, and were keen that they didn't risk losing it – they wanted to invest it and see it grow.

David had taken early retirement and was living on a small pension, but wasn't yet entitled to a state pension. Sue was still working, and although she wanted to spend more time with David they couldn't afford for her to give up her salary.

Our solution

By paying off the remainder of their mortgage with some of the lump sum, David and Sue's expenses were reduced by £956 per month. With the remainder of the money, a low-cost investment portfolio was created that would provide them with around £11,000 a year of regular and reliable income, increasing with inflation. Due to tax efficiencies being put into place, only £2,000 of that income will be liable to basic rate income tax; the remainder is received with no liability, with the proportion of tax-free income increasing over time. In designing a portfolio for David and Sue, we aimed to create a balance between generating income that can help realise the couple's objectives and staying within their comfort zone on risk. We also made sure the portfolio aimed to meet inflation so its purchasing power is maintained over the longer term.

The benefits

The changes we made to David and Sue's financial plan immediately enabled Sue to reduce her working week to three days; we advised them that it would be affordable for her to finish working entirely when David's state pension commences. As a result, the couple wondered if they could take a ‘little’ extra out of the portfolio to buy a sailing boat – and yes they could. David and Sue are now spending much more quality time together, safe in the knowledge they can afford to do so; they are also able to make long-term plans now that they are clear when Sue can finally stop work altogether.

Further case studies

Young professional looking to retire early Business owners reassessing their finances A woman and her friend dealing with dementia Couple wanting to ensure a comfortable retirement