What savings does Mike need?

He estimates that he needs about £4,290 a year to maintain his standard of living while both he and his wife are alive, and he wants to make sure that the survivor has about £6,900 a year.

The summary above shows that he must still provide £488 p.a. (i.e. L2,290 - ,962) while both are alive, and £443 p.a. (i.e. L ,900 - L ,099) for his widow after his death. The best way to ensure a regular income after retirement is to buy an annuity (see Section 9) at retirement. To do this, Mike has to build up during his working life sufficient to pay for an annuity when he retires.

Mike's wife will be 6o when he retires at 69, and, he sees from Table zo on page 162 that a purchase price of £6,000 would provide a gross yearly annuity of £98.4o. He calculates that he would have to save about £4,000 by the time he is 69 to provide the annuity he needs.

What investment should he choose? The main types of longterm investments are:

Unit trusts

Shares

Property

Government and local authority stocks and bonds

With-profits endowment assurance

Equity-linked assurance, managed and property bonds

Space prevents any individual or close comparison of each type of investment in the present guide. In Mike's case, where he needs the £4,000 at 69, he can't afford to take investment risks, so his choice is narrowed either to government and local authority stocks and bonds or to a with-profits endowment assurance policy. Because of the tax relief and additional insurance protection, he decides to take the endowment policy. However, if he had been in the position where he already had some savings to fall back on and was prepared to be a little adventurous, he could have opted for an equity-linked assurance policy. The cost of a £4,000 with-profits policy is about £608 a year.


Personal accident policies

Payroll Giving
It’s all very easy to organise.
Just ask the Personnel or the Payroll Department at your company and, if they already have a scheme, they will give you the relevant forms.  HM Revenue & Customs’ website has a list of Payroll Giving agencies and explains payroll giving in more detail.

Salon Gold Insurance

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read on: Summary of Mike Fawcetts new policies

He estimates that he needs about £4,290 a year to maintain his standard of living while both he and his wife are alive, and he wants to make sure that the survivor has about £6,900 a year.

The summary above shows that he must still provide £488 p.a. (i.e. L2,290 - ,962) while both are alive, and £443 p.a. (i.e. L ,900 - L ,099) for his widow after his death. The best way to ensure a regular income after retirement is to buy an annuity (see Section 9) at retirement. To do this, Mike has to build up during his working life sufficient to pay for an annuity when he retires.

Summary of Mike Fawcetts new policies