School Fees Planning - Case study - The Nemo family
A case study of how the Nemo family managed, over the relatively short period of three years, to increase their level of savings and investments, clarify and improve their pension benefits, remain on track to repay their mortgage early and achieve their original goal, of planning ahead for their son’s school fees.
Mr and Mrs Nemo wanted to plan for, and manage, the costs of school fees. SFIA recommended that they do this via equity release for the first four years and thereafter via an ISA investment. This they did and all was fine until Mrs Nemo was made redundant the following year. She decided to become a self-employed consultant and, as her income was now less certain, this change in the family’s circumstances raised question marks over the level of funding of the ISA. To complicate matters further, Mr Nemo's employment as a pilot was put in jeopardy later that year, due to the sudden decline in bookings.
At that time, a falling stock market meant that using investments was not an attractive solution and so, given their situation, this led to Mr and Mrs Nemo deciding to suspend their monthly investments and concentrate instead on the mortgage repayments.
Over the following months, SFIA had several meetings with the clients to ensure that the family’s finances remained on track and that the school fees would not present an issue.
Happily, Mrs Nemo's self-employment proved more successful than originally anticipated and Mr Nemo's employment no longer looked to be in threat. This being the case, their investments were continually monitored with re-allocations being carried out to protect the capital from further falls; this led to there being no loss to the original capital invested.
A new mortgage was arranged to provide for the provision of the school fees on a firmer basis. It was decided to cap the cost of school fees at £550 per month, even though their actual cost would be, on average, £912 per month once their son began at senior school. Additionally, since Mr Nemo intended to retire whilst his son was still in private education, the new mortgage was set up so that it would be fully repaid in time for his retirement.
SFIA’s planning not only managed to cap the cost of the school fees and arrange for the mortgage to be repaid early, the net expenditure to Mr and Mrs Nemo increased by only £50 per month. With good advice and careful financial management the Nemo family improved their overall financial position and they increased their level of monthly savings, even though, for a time, their income fell. A review of the client’s pension provision also resulted in an improvement of benefits, without any additional contributions.
School Fees Planning - Case study - The Nemo family
A case study of how the Nemo family managed, over the relatively short period of three years, to increase their level of savings and investments, clarify and improve their pension benefits, remain on track to repay their mortgage early and achieve their original goal, of planning ahead for their son’s school fees.
Mr and Mrs Nemo wanted to plan for, and manage, the costs of school fees. SFIA recommended that they do this via equity release for the first four years and thereafter via an ISA investment. This they did and all was fine until Mrs Nemo was made redundant the following year. She decided to become a self-employed consultant and, as her income was now less certain, this change in the family’s circumstances raised question marks over the level of funding of the ISA. To complicate matters further, Mr Nemo's employment as a pilot was put in jeopardy later that year, due to the sudden decline in bookings.
At that time, a falling stock market meant that using investments was not an attractive solution and so, given their situation, this led to Mr and Mrs Nemo deciding to suspend their monthly investments and concentrate instead on the mortgage repayments.
Over the following months, SFIA had several meetings with the clients to ensure that the family’s finances remained on track and that the school fees would not present an issue.
Happily, Mrs Nemo's self-employment proved more successful than originally anticipated and Mr Nemo's employment no longer looked to be in threat. This being the case, their investments were continually monitored with re-allocations being carried out to protect the capital from further falls; this led to there being no loss to the original capital invested.
A new mortgage was arranged to provide for the provision of the school fees on a firmer basis. It was decided to cap the cost of school fees at £550 per month, even though their actual cost would be, on average, £912 per month once their son began at senior school. Additionally, since Mr Nemo intended to retire whilst his son was still in private education, the new mortgage was set up so that it would be fully repaid in time for his retirement.
SFIA’s planning not only managed to cap the cost of the school fees and arrange for the mortgage to be repaid early, the net expenditure to Mr and Mrs Nemo increased by only £50 per month. With good advice and careful financial management the Nemo family improved their overall financial position and they increased their level of monthly savings, even though, for a time, their income fell. A review of the client’s pension provision also resulted in an improvement of benefits, without any additional contributions.