It’s lunchtime, 25th of December, and the festivities are in full swing. The crackers have been pulled, the jokes have been told, and Grandad’s already on his fourth glass of Baileys.
Here, at this table, sits a microcosm of our society – each family member at a different life stage, with their own goals and priorities. And with 2017 just around the corner, there’s no better time to start planning your financial future...
Max isn’t thinking about anything apart from how much he hates sprouts. But his parents, Sarah and Phil (both sprout fans) are thinking about how they can give their son the best possible start in life. They know that if they put back £50 a month in a savings account or Junior ISA (JISA), Max could have over £10,000 when he turns 18, to put towards driving lessons or a deposit on his first home.
Chris knows that graduates in England leave university owing over £44,000* on average, so he’s knuckling down to make his degree worthwhile (after the Christmas break, of course). After blowing his first-ever maintenance grant in a mere matter of weeks, his parents – Julie and Alan – had to educate him on the importance of budgeting.
Chris is now thinking further ahead, to after he graduates. Not so keen on the idea of living back with mum and dad, he’s considering getting a part-time job in the New Year and saving everything he earns. When Chris has a weekly or monthly income, he could get up to 5% interest* on his money if he pays into a regular savings account.
Like 17% of UK adults who have financial dependents*, Sarah is yet to get life insurance. She’s the main breadwinner of the house and knows that, if she was unable to work, her family would struggle to cope financially. So, as a new parent and looking to protect her family’s future, taking out the right amount of life insurance is now on Sarah’s to-do list.
All Phil can think of as he chomps down on a crispy potato is getting on the property ladder in 2017. He’s already imagining how he’d decorate Max’s bedroom, but he knows that they need to save more before they can begin house hunting. As a possible option, they could open a Help to Buy ISA* where the Government boosts savings by 25%.
Julie and Alan are on an even keel in terms of their savings and pensions pots. But, after learning that there’s an £11bn defined contribution pension shortfall* in the UK, the couple are worried that the money they’ve saved may not be enough to fund their dream retirement.
Julie and Alan need to start planning ways to maximise their savings so they can live a happy and comfortable retirement. At this stage, they may want to work out their retirement income, clear off any remaining debt, and consider boosting their pensions by increasing contributions.
Sandy and Ron helped towards Chris’ university fees, and they now want to save some money for their youngest grandchild. They could invest in NS&I Premium Bonds* on behalf of Max; with a minimum £25 investment, the money will be locked away for five years and will earn 2.5% tax-free interest.
Ron is contemplating whether he needs to review their life insurance to ensure current plans are meeting their needs. But, most importantly, he’s wondering where Sandy has hidden the bottle of Baileys.
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