August 7, 2024
Clare Clark has been giving financial advice to clients for longer than she cares to admit! Her clients have demonstrated how much they value her long-term approach, as many of them have been with her for over two decades, through changes in their personal lives, career and family; and in several cases she now advises other members of their family, including the next generation.
Clare’s very personal approach is typical of the Talis IFA approach to financial advice.
She often begins a new client relationship by guiding private clients who are just starting to explore the financial world for themselves.
As Clare says, “Sometimes new clients, particularly women going through a divorce, come to me with a ‘rabbit in the headlights’ look. They may be independent, professional women, but often they have never had to deal with making these types of financial decisions before. I’ll offer them advice, walk them through their options, and help them to build their knowledge and confidence.”
She recalls how, several years ago, a client referred her to a friend who needed help. After an elderly, overwhelmed new client handed her multiple carrier bags stuffed with paperwork, Clare spent over a week sorting and filing, working out what her client had, and where it was. She even found a bank account with a substantial balance that her client had no idea existed.
She understands that she can never assume that her clients understand how everything works, and takes an individually tailored approach to making sure they have the information they need to move forward with confidence.
Independent pension and investment advice
Clare specialises in advising clients on pensions and investments, helping them to accumulate wealth for a secure financial future and comfortable retirement, and ensuring that when they do retire, their income is structured to be tax-efficient.
She has seen how attitudes towards retirement have changed over the last 25 years, with many more people taking a different view of their ‘second 50’, and choosing a more relaxed approach to retirement.
Clare says, “It’s become noticeably more common for people to want to gradually reduce their hours leading up to retirement, or to reach State Pension age but decide to continue working in some form, at least for a while, rather than down tools one day and switch straight into retirement mode.
“People also have greater expectations of their retirement lifestyle than previous generations might have, seeing it as a new life stage with opportunities to enjoy a different lifestyle, pursue new activities, travel or spend more time with family.”
Clare believes that everyone knows when the right time comes to retire, and sees her job as helping them to maximise the value of their pension savings by advising them on their options, and helping them to make the most appropriate and tax-efficient decisions.
Why retirement doesn’t mean immediately spending your pension
Clare says, “We’re conditioned to believe that when we retire, we need to immediately start to take out pension benefits – either as flexible drawdowns or via an annuity. But it’s not necessarily the most tax-efficient option, particularly if you’re going into semi-retirement. Where there are savings and investments, including ISAs, and people are still earning an income from working, I usually encourage them to look at other options for topping up their income.”
Keeping your pension pot (and continuing to pay into it if you can) can be the most tax-efficient option. Another big advantage for many people who take a long-term view is that pension funds usually fall outside an estate for inheritance tax (IHT) purposes. So it can make sense to draw down money from other savings and investments first, leaving pension funds alone until you need them. If you never need to access those pension funds, and want to leave them to your beneficiaries, leaving them alone is the most tax-efficient way of passing on money.
Equally, though, if you are still working, you need to understand the tax implications of combining your earned income with drawing down funds from a pension or elsewhere, to ensure you are making the most of your tax-free allowances and avoid unpleasant surprises when you submit your tax return.
Understanding your tax liabilities
One of the common questions Clare encounters is, ‘Can I afford to semi-retire when I want to?’
She frequently finds that she needs to guide clients towards understanding the real impact of reduced hours on their income – and that the picture is better than they imagined.
“If you are a higher rate or additional rate tax-payer,” she explains, “reducing your working hours to, say, three days a week instead of five, doesn’t necessarily mean you will end up with only three fifths of your income. If your reduced salary takes you into a lower tax bracket, you may be pleasantly surprised.”
Breaking down barriers to conversations about money
Clare has found that once people reach a certain age, they become more concerned about running out of money. Often this is because they are thinking about the cost of care, should they need it, whilst also wanting to pass on some of their wealth to the next generation.
At the same time, many people are reluctant to have important conversations about money – with their spouse or partner, children or parents.
Breaking down the generational barriers to these conversations is one area where Clare excels. She takes the time to listen to what her clients tell her about their lives, aspirations and relationships. Once she understands what they want to achieve, and their concerns, she works out solutions.
It’s an ongoing process as well. Clare fully understands that circumstances change, so she encourages regular reviews with her clients, to make sure that their cash-flow forecasts and financial plans are up-to-date and appropriate.
Conversations about estate planning, and minimising IHT liabilities can be some of the most difficult for many people, and it’s not unusual for people to be reluctant to make decisions.
Clare has a no-nonsense approach to encouraging her clients to consider their options, particularly when they are in a strong financial position with assets likely to exceed the IHT threshold.
I always say, “It’s your money, and your decision. But these are your options. If you keep your money where it is now, the tax man will come after it when you die. Ask yourself how you would feel about writing out a cheque to HMRC, for say £250k, right now!”
To find out more about advice for long-term planning towards a comfortable retirement and secure financial future, contact Clare.
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