If you are Financially Savvy you are in the minority. We found very few people in this profile.
However, if you are it means you have a higher than average income and have made significant savings into a multitude of investment products.
You are very tax aware and regularly use your ISA allowances, you also ensure that you are taking advantage of the tax relief associated with pensions.
You are a key believer in diversity, when we analysed your investments we discovered investment portfolios covering a wide variety of asset classes.
You have also considered your protection needs, and taken steps to ensure your family have a measure of ill health and death protection.
The risks we believe exist with this profile are:-
Legacy planning, you have successfully amassed wealth, how do you ensure what is not spent can be passed down the generations?
Retirement planning, with a multitude of ways to retire you need to ensure you do it in the most tax efficient way to suit your world.
Financial security, we often found that you have some protection but in general not enough.
Stating the obvious, you like buying property. Typically you will have portfolio of three or more properties, two of these are rental properties.
The incomes of this profile varied widely, from incomes of £20,000 up to large incomes of £100,000 or more.
One thing that really interested us was that ages in this group varied significantly, we saw some very young Property Entrepreneurs and some elder property investors with a wide range of ages in between.
The significant thing about this profile is that typically you have only invested into property. You have not considered investing or saving into any other types of plan.
Therefore you have very little pension savings, and you fail to make use of your ISA allowances. This means you are failing to save in the most tax efficient manner possible.
The risks we believe exist with this profile are:-
Lack of diversity - property is your only asset.
Indebtedness - your main residence mortgage is typically quite high as this has been your route to funding investment properties.
Your wealth and income are reliant on the health of the property market.
Complicated families are growing and here to stay. The rise in divorce and re-marriage has led to an increasing incidence of this profile.
The typical features we see are increased non discretionary spending due to maintenance costs, coupled with a loss of assets as they are split and a rise in property loan to values as homes are sold and the proceeds divided.
Typically what members of this profile find is their disposable income falling as they are now supporting a wider family circle.
Your financial priorities are forced to change as you work to re-establish yourself on the property ladder and have less money to save for your future.
The risks we believe exist with this profile are:-
Lost planning opportunities, the impact of divorce and the need to re-establish yourself takes away a number of years of saving for your future.
Increased costs, splitting families does not always split the costs, in most cases outgoings are significantly increased.
Increased risks, your income may be supporting two homes and households, have you really considered the impact of the loss of you?
This is the profile which led to the greatest discussion. Family On A Budget can relate to so many of us due to our lifestyles and personal choices.
We found a significant income range from families on low incomes to families on over £100,000 plus.
Mathematically what created this profile was a significant lack of disposable income, a lack of financial products and savings, and very high mortgage loan to values, with the majority of this profile only owning 15% of their homes.
This profile is made up of younger people with growing families up to those in middle age with children still in education. Essentially then, it is the cost of families which put people into this profile.
The risks we believe exist with this profile are:-
Lack of disposable income - you have very little spare capital to put towards the future.
Lack of savings - you have no wriggle room should things go wrong.
Lack of future planning - you need to start saving today to pay for tomorrow, no matter how small it is better to start today than wait.
If you are Lifestyle Content then there is very strong possibility that you are self-employed and single, certainly without children.
Your income is very variable, although self- employed you are not running a typical 9-5 business you are in all probability freelance, a contractor or a consultant.
You structure your lifestyle around your contracts, when working you work every hour possible, when not working you travel and ensure you can experience as many new opportunities as possible.
You are a born risk taker, and this migrates into your financial World. You have not saved for the future, your finances are more focused on paying for the next adventure, not retirement.
In general the lifestyle content are a younger age range. We believe that you migrate into other profiles as you start to settle down and feel the need for roots and stability.
The risks we believe exist with this profile are:-
Lack of forward planning, living for today means you have not planned for tomorrow.
Variable income, the peaks and troughs in your income create reasons why not to plan.
Financial security, being self-employed carries far greater risks, protection should be your priority.
