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How it works:
- We will call you back to find out more about your aims and requirements
- We will arrange a meeting with one of our team at a convenient time, either over the phone, on video, at your home or workplace, or at one of our offices
- You will be able to ask any questions you have and find out more about managing your wealth with Saltus
- Your review will be at our cost and there is no obligation to work with us afterwards
Who we work with:
- Individuals with £250,000 or more in investable assets. This includes pensions, ISAs, other tax-wrappers and cash available for investment.
Your home may not be an asset. In fact, it could be your largest liability and it is, certainly, the least effective pension pot you could imagine. This may sound controversial but bear with me.
There’s a great book called ‘Rich dad, poor dad’ written by author and businessman Robert Kiyosaki, who has a net worth of around $80 million. In his book, Robert explores the differences between the ultra-wealthy and the middle-class. He identifies that the wealthy tend to take the income they generate and use it to acquire assets that will then fund their liabilities. In contrast, the middle-class throw our income straight into an ever-increasing amount of liability, like a mortgage or a car loan. This leaves us stuck on a continuous cycle of working for income to ensure our liabilities continue to be met.
Assets vs liabilities
Robert defines assets and liabilities in a wonderfully simple way. An asset is ‘something that puts money into your pocket’ and liabilities are ‘things that take money out of your pocket’. On that basis, our primary residence is probably the most significant liability we have! If you consider this carefully, we are constantly directing money towards our homes: paying off the mortgage, buying furniture, fixing the boiler, maintaining the garden, and refreshing the paintwork, for example. You name it – it’s a never-ending cycle of overheads. These constant expenses mean our homes are a far cry from putting money into our pockets.
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Of course, there will be some level of capital appreciation when it comes to our primary residence. Although, it’s worth noting this will probably be lower than we’ve seen historically, given how depressed interest rates are. Indeed, should they begin to rise again (which many predict), capital appreciation could stagnate entirely. However, that’s not really the point I want you to grasp onto.
Your house is not your pension
My primary angst is when I hear: “I don’t need to worry about my pension, my pension is my house.” or “My only focus is the mortgage.”
Let’s break that down: Imagine that a house worth £750,000 is your pension pot. If your only plan is to downsize, you have to sell the house and buy another. The new house may be around £500,000. Most clients I speak with want to at least live somewhere reasonable, even if it will be a significant downgrade. Not only that, but you still have to pay for the upkeep of the new house.
This would mean that you can only access one-third of your pension pot (£250,000), on top of needing to then pay into the pot continuously. Not a very attractive proposition.
To make matters worse, when it comes to it, a lot of people don’t want to move. They have a strong connection with the house they’ve always lived in and, when it’s time to take the leap, they simply don’t want to change.
I’m certainly not saying that homeownership is a bad thing or that you can’t make money out of your home because, of course, to a certain extent, you can. What I am saying is that your home must form part of a wider plan. It is something to aim for alongside savings and investments for retirement, not to replace them.
When you think about it like this, your home may not be such a great asset after all. So, please stop treating your house like a pension pot and you’ll be far wealthier as a result!
All authors have considerable industry expertise and specific knowledge on any given topic. All pieces are reviewed by an additional qualified financial specialist to ensure objectivity and accuracy to the best of our ability. All reviewer’s qualifications are from leading industry bodies. Where possible we use primary sources to support our work. These can include white papers, government sources and data, original reports and interviews or articles from other industry experts. We also reference research from other reputable financial planning and investment management firms where appropriate.
Saltus Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority. Information is correct to the best of our understanding as at the date of publication. Nothing within this content is intended as, or can be relied upon, as financial advice. Capital is at risk. You may get back less than you invested. Tax rules may change and the value of tax reliefs depends on your individual circumstances.
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Financial planning can help you reach your goals in life, whether you want to determine when you can retire comfortably, bring organisation to your financial world or pass on your wealth effectively.
Pensions and retirement planning
Deciding when to retire is a challenging decision and can feel like a leap of faith. At Saltus, we gather information on all of your existing assets and then use our technology and expertise to show you exactly how to achieve the retirement you’re after.
Reducing your tax burden
How to structure your wealth and access income should be approached in a sophisticated way. A detailed financial plan may use pensions, ISAs, general investment accounts, offshore bonds and other tax wrappers to ensure you can draw your money in a tax-efficient manner.
Consolidating your wealth
Holding multiple investment accounts and pensions can mean they’re hard to keep track of and administer. We’ll help you overcome this by consolidating your accounts into a single plan so that you can understand your financial position with ease.
Protecting you and your assets
We protect our cars and houses without much thought yet you might be the most valuable asset in your family. Whatever your situation, we can provide advice to ensure you have the right level of insurance in place to keep your finances protected.
Passing on your wealth
Estate planning is more important than just having a Will. We’ll work closely with you to understand how estate planning, which has emotional as well as financial consequences, can impact your overall financial plan.
Significant life events
Significant life events can present great opportunities but also considerable challenges. Whether you are going through a business sale, divorce or are receiving a lump sum, we’ll help build a financial plan to meet your changing lifestyle.