The road to somewhere…

Our financial planning expert Poppy explains how to prepare and the things to consider before you embark on your financial planning journey.

Poppy’s Planning | Financial Planning

Photo by Matt Howard via Unsplash

When you start out on a journey you would normally know where your destination is. Whether it’s an autumn walk in the countryside or a cross country train adventure, you will generally have an idea of where you are aiming to get to. You may also have a detailed plan for how you intend to get there, or only the vaguest of ideas, but at least you know where you are starting from.

The financial planning process is not dissimilar to this; you know where you are today and have an idea of where you want to get to. Your financial destination may be a set age at which you want to retire (or change course at), or it may be a financial target which then allows you to enjoy a more relaxed lifestyle (or a change of direction).

Similarly to a geographical destination, your financial destination may change once you have embarked on your journey. Let us consider the following six stages to prepare you for the journey ahead:

Stage 1 — Set the destination

Where do you want to get to? Do you want to retire at 65 or do you want to retire when you have enough savings to provide you with a comfortable level of income? Do you want to change direction once you reach a certain point or maybe set up your own business? What is the income you think you may one day require and remember to allow for inflation?

Stage 2 — Where’s the departure point?

Analyse what you have at the moment, including all of your savings; pensions, ISAs, cash deposits, shares etc. then add everything together. What figure do you come to?

Assuming you have not earmarked any of these savings for a particular event along the way such as a house purchase, wedding, school fees etc. then this forms part of your long-term savings pot. You can then use the Rosecut calculator to see what this pot of money is likely to look like in the future.

Stage 3 — Can you refuel along the road?

How much do you think you can realistically save to help you get to your destination? Is it better to boost your pension and get a turbo boost in the form of tax relief up front or is it better to save in Individual Savings Accounts (ISAs) and not have to pay tax on any ISA income or capital gains when you get to your destination?

Ideally both. Or maybe if you are a very higher earner and cannot contribute too much to pensions then you could consider venture capital trusts with 30% income tax relief and tax-free dividends.

Stage 4 — Stopping along the road

Quite often on a journey you will get the sudden urge to go and explore somewhere else along the way. Sometimes you may have planned a number of stopover points before you set off.

Your financial journey can prove to be the same; you will have a number of pre-planned stopovers — a future property purchase, school fees, a sabbatical etc. and there will be those that just happen, like an unexpected business investment opportunity or even an unexpected child!

What this means is that some of the money you start out with and accumulate along the way will probably be spent before you reach your destination and therefore needs to be ringfenced at departure.

Stage 5 — What if my engine overheats?

If you are travelling many miles across country (or even across continents!) in a car then you will probably want to have it regularly serviced to make sure that the engine runs smoothly and the brakes are safe.

Same with your finances. Perform regular checks along the way to make sure you are safely on course and that you are taking advantage of any tax breaks, including new ones that may come along.

Stage 6 — Reaching your destination

With every good journey, reaching the final destination provides a few moments to rest and reflect on the roads you have travelled along. But after a suitable period of contemplation, it’s time to start planning the next exciting journey.

I guess many of us have a dream about walking away from all the stresses of working life — the routines, the commuting, being controlled etc. Becoming like a student again with less unnecessary responsibilities and dependencies. For many of us facing a return to the old life after working from home for 18 months, the dream is probably more in focus than ever before.

Increasing numbers of people are opting to take a sabbatical or career break. In fact, some employment contracts specifically provide for it…but unfortunately on a non-paid basis!

Visit our website to learn more about how Rosecut can help you embark on your own journey: To speak to an advisor in more detail about your situation please drop us an email at



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