Dave and Joanna are in their late 50's and considered themselves financially secure and comfortable with their lifestyle and future plans. Dave is a construction manager while Joanna works part time (0.6 FTE) as an architect. They have two daughters: Kate and Jenny. Kate is 19 years old and just started university while Jenny is 26 and is working as a legal secretary. Their financial goal was for both of them to retire when Dave turns 65 and enjoy their time together. They wanted to purchase a holiday home in Portugal with a planned budget of 180,000 Euros, support Kate during her studies at university and help their children with house deposits. Unfortunately, recent events have made them rethink their plans. In September 2017, Dave fell ill and was hospitalised. He had a heart attack and was off work for a couple of months. He has recovered, and is back at work 3 days a week, however he is now considering retiring earlier than planned. He has serious concerns about his health and believes that working in high stress environment contributed towards his health problems. Dave wants to retire by the end of this calendar year. Joanna is planning to carry on working for another couple of years but she would like to retire sooner rather than later.

Dave and Joanna have always enjoyed their incomes and are used to go out to dinners at least twice a week and having at least 2 overseas holidays a year, plus regular city breaks with their friends and daughters. Dave enjoys golf and is a member of a local golf club for an annual subscription of 800. Joanna likes shopping and decorating their home. She looks after herself and spends about 300 per month on treatments and her personal trainer. In May 2017 they bought Audi Q7 on a personal contract hire. The monthly payments are 500 for the next two years.

The recent events has made both Dave and Joanna think about their future in a different light, and they are now focussed on securing their financial future in the short to medium term, as well as being concerned about what would happen to their assets and income in the event of either of them dying prematurely . They have come to you for advice on the following matters:

(i)They realise that the earlier retirement date will reduce Dave'spension expectations. You have been asked to consider the options Dave has for retiring by the end of this calendar year, quantify the impact and recommend the best course of action. He wishes to secure an appropriate income a) up to state pensions age and b) thereafter, assuming a maximum life expectancy of 80.

(ii)You are also asked to consider how Dave's changed circumstance impact on Joanna's pension planning - what recommendations can you make to ensure she is financially secure for the future should Dave die prematurely?

(iii)They have also asked whether there are any other steps they should take to ensure their family's future financial security as well as their ambition of purchasing a holiday house?

You will need to consider

-what an 'appropriate income ' might mean in real terms,

-the most efficient use of their pension savings and other existing assets (eg non pension investments and inherited money), and

what provision they should make to minimise the inheritance tax implications in their pension strategies and estate value should Dave and/or Joanna pass away prematurely

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