investments What they didnt teach you at school but should have ! - PowerPoint PPT Presentation

Savings and investments What they didn’t teach you at school but should have ! Jonny Mynes James Hollowell Investment Team Director Director, Private Clients

Source: Google images, Colepalmer.com 2

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Life cycle 4 4

Debt The UK has a nasty debt habit. While many of the grandparent generation follow the 'neither a borrower nor lender be' mantra, some of today's parents are debt – bingers relying on plastic as a crutch to fuel unsustainable lifestyles. Martin Lewis, http://www.moneysavingexpert.com/family/financial- education-important 5

Bob Lowincash Credit Card Interest - 17.9% (pretty standard) • Balance - £3,000 • Minimum payment – 1% plus interest • • Time frame Minimum • 1 Month £71.50 2 months £70.75 • 12 months £63 • 60 months (5 years) £39 • 120 Months (10 years) £21 • 240 months (20 years) £6 • 27 years 4 months and £4,000 interest the debt would be paid off • 6

The Most important People in the Room Source: Google Images, forbes.com Source: Google Images, businesfinancialpost.com Source, Google Images, businessinsider.com Source, Google Images, 365news.gr 7

UK Base Rate over the last 100 Years 8

UK 10 Year GILT Yields 9

Compounding 10 10

Compounding Example £2,500 contributions per annum / 7% growth rate per annum • £2,500 contributions per annum / 7% growth rate per annum • Jayne contributes from 21 – 30 takes pension at 70 = £25,000 • Jayne contributes from 21 – 30 takes pension at 70 = £25,000 • Bob contributes from 31 – 70 takes pension at 70 = £100,000 • • Bob contributes from 31 – 70 takes pension at 70 = £100,000 Bob = £534,000 (5 fold return) • Jane = £553,000 (22 fold return) • • Rule of 72 11 11

Mr and Mrs Baby Boomer 12

No wonder they look smug! They both work in the finance sector. • • They bought their house in 1975 for £12,000. Both benefited from a guaranteed pension. • Enjoyed 14% on their saving deposits in the late 80’s. • Enjoyed booming stock market growth. • Employee Benefits: Mortgage subsidy. • Lifestyle and flight allowance. • Company car. • Huge annual bonus – just for turning up! • 13

The changing world of pensions 14

Income in retirement – where is it coming from? The States of Guernsey, at the prescribed retirement age, currently pays a weekly • benefit of £204.45 (£10,631.40 per annum) for a fully funded contribution history of 50 years. You may have a second home generating a rental income. • You may be lucky enough to inherit money/assets. • A structured tax efficient pension scheme. • 15

I have a company pension scheme, I’ll be ok. So how much should I contribute? Take the age you start your pension and halve it. Put this % of your pre-tax salary aside each year until you retire. 16

In Summary Exceptional Times. The power of compounding. Professional guidance 17

Important information Brooks Macdonald Funds Limited is authorised and regulated by the Financial Conduct Authority. Registered in England No 5730097. Registered office: 72 Welbeck Street London W1G 0AY. Investment Fund Services Limited (IFSL) is the Authorised Corporate Director for the IFSL Brooks Macdonald Fund. IFSL is registered in England No. 06110770 and is authorised and regulated by the Financial Conduct Authority. Registered office: Marlborough House, 59 Chorley New Road, Bolton, BL1 4QP. Copies of the Prospectus and Key Investor Information Documents are available from www.ifslfunds.com or can be requested as a paper copy by calling 0808 178 9321 or writing to IFSL, Marlborough House, 59 Chorley New Road, Bolton, BL1 4QP. Brooks Macdonald Financial Consulting Limited is authorised and regulated by the Financial Conduct Authority. Registered in England No 2621847. Registered office: 72 Welbeck Street London W1G 0AY. Brooks Macdonald Retirement Services (International) Limited is licensed and regulated by the Jersey Financial Services Commission. Its Guernsey branch is licensed and regulated by the Guernsey Financial Services Commission. Registered in Jersey No 106423. Registered Office: Liberation House Castle Street St Helier Jersey JE2 3AT. More information about the Brooks Macdonald Group can be found at www.brooksmacdonald.com. 18