Case Study: Setting up a pension for the grandchildren

Ulrik and Silvia Andreas are fortunate to have both retired with final salary pensions. This has provided them with excess income that they wish save for the benefit of their only grandchild, Lucas.

Contributions of just £2,880 per annum until Lucas is 18 could equate to a pension fund of nearly £600,000 when Lucas reaches 55 if it grows by 5% each year. From 55, Lucas has the option to withdraw up to 25% of the fund (£150,000) tax free.

Regular gifts made from ‘normal expenditure out of income’ will also be excluded from Ulrik and Silvia’s estate for inheritance tax purposes.

Topics: Estate planning, Family Wealth Planning, Pensions

How long will you live?

For many years this has been largely a philosophical question, or a quandary for actuaries at insurance companies. However in the new world of pension flexibility in which an annuity is no longer compulsory it has become a critical question: which will last longer – our money or our life?