The story so far...
Mary has significant investable assets – how can she better enjoy her wealth? Her adviser, Glenda, has some ideas …
Glenda: Mary, so you have your husband’s pension, which brings you in around £4000 a month after tax, so that’s £48,000 a year. And then you have the £3 million invested. That’s paying an income of around £55,000 a year.
Mary looks at GLENDA - not sure exactly what she’s trying to tell her.
Mary: So, what are you saying? I need to cut back? I knew I shouldn’t have gone on that cruise. It felt extravagant at the time.
Glenda: Exasperated (in a friendly way) No Mary, I’m saying that you should go on more cruises. You can afford to spend much more! Your expenses at the moment, they’re barely hitting fifteen-hundred pounds a month.
Mary: That’s too much, isn’t it?
Glenda: Erm, no. You’re accumulating capital at a rate of over seventy thousand pounds a year.
Mary: Oh? Is that enough? Do be honest. You know Jack, my husband, always took care of the money. I miss him terribly, and in ways I didn’t always imagine.
Glenda: I know that must be hard. But Jack worked a long time for that money. I’m sure he’d want you to enjoy it?
Mary: Enjoy it? How would I do that?
Glenda: Your daughter…
Mary: Catriona … I wish I could see her more often.
Glenda: Her new job sounds wonderful. You know, one idea might be to gift her some money now, as long as you live more than another seven years, you’ll avoid up to 40% in tax.
Mary: You think I might die within seven years?
Glenda: Not at all. You’re young and vigorous – and that’s why it makes sense to gift some money now, while you’ve still got all your future in front of you!
Mary: I’m sure Catriona could use some help.
Glenda: Of course she could. And think of the joy you’d feel seeing the improvement in her life.
Glenda: And while we’re at it, what about a nice lump sum to Cancer Research? I know, with Jack, how important that is to you. Again, if you can do that now you avoid tax implications in the future.
Mary: Goodness me, they need the money even more than Catriona!
Glenda: These are your golden years, Mary. You need to make the most of them!
Mary: I know you’re right, and I’m grateful for your advice.
Glenda: What do you think, then, shall I come up with some ideas on what might be suitable amounts?
Mary: Perhaps not just yet.