Savings and investmentsWhat they didn’t teach you at school but should have !

Jonny MynesInvestment Team Director

James HollowellDirector, Private Clients

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Source: Google images, Colepalmer.com

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Life cycle

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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

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• 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

Bob Lowincash

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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

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UK Base Rate over the last 100 Years

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UK 10 Year GILT Yields

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Compounding

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Compounding Example

• £2,500 contributions per annum / 7% growth rate per annum

• Jayne contributes from 21 – 30 takes pension at 70 = £25,000

• Bob contributes from 31 – 70 takes pension at 70 = £100,000

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• £2,500 contributions per annum / 7% growth rate per annum

• Jayne contributes from 21 – 30 takes pension at 70 = £25,000

• 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

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Mr and Mrs Baby Boomer

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• 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!

No wonder they look smug!

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The changing world of pensions

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• 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.

Income in retirement – where is it coming from?

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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.

I have a company pension scheme, I’ll be ok.

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Exceptional Times.

The power of compounding.

Professional guidance

In Summary

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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.

Important information