Faisal and Sarah are in their late 50's and considered themselves financially secure and comfortable with their lifestyle and future plans. Faisal is a Senior Engineer in the Aerospace industry while Sarah works part time (0.6 Full Time Equivalent - FTE) as an Architect. They have three children: Sadiq, Jay and Lidia. Jay and Lidia are twins (age 19), and in September 2022 started university (assume 3 years course). Sadiq is 24 and is currently working towards her ACCA, hoping to finish in in 2025. Their financial goal was for both of them to retire when Faisal turns 65 and enjoy their time together. They wanted to purchase a holiday home in Spain with a planned budget of 200,000 Euros, support Jay and Lidia during their studies at university, and help Sadiq with a house deposit of about 15,000 to 20,000. Unfortunately, recent events have made them rethink their plans. In September 2023, Faisal fell ill and was hospitalised.

He had a minor stroke (transient ischaemic attack - TIA). He has recovered, and is back at work 3 days a week (0.6 FTE). However, due to the loss of income the family had to tap into their savings to pay for the family Christmas holiday in Maldives. Faisal is now considering retiring earlier than planned and is wondering whether the family savings are sufficient to meet their plan and support everyday expenses. He has serious concerns about his health and believes that working in high stress environment contributed towards his health problems. Faisal wants to retire by the end of this calendar year (2024). Sarah is planning to carry on working for another couple of years but she would like to retire sooner rather than later.

Faisal and Sarah 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 children. Faisal enjoys golf and is a member of a local golf club for an annual subscription of 950. Sarah likes shopping and decorating their home. They both spend about 500 per month in total on treats and treatments and Sarah's personal trainer. In February 2022 they bought Audi Q7 on a personal contract hire. The monthly payments are 550pm for the next two years. They have another car, BMW 1 series that is used for short trips. This car was bough outright five years ago.

About three years ago Faisal invested 85,000 in Polar Capital Global Technology Fund (https://www.trustnet.com/factsheets/o/g5v6/polar-capital-global-technology-i-gbp). The investment had generated some returns but its value declined only to recover recently. The investment is currently worth 100,000. Faisal does not understand how it works as the fund was recommended by his work friend who is a technology enthusiast. Faisal is worried that the fund is too risky and is considering selling it. He did not like the fact that the investment lost its value. Faisal does not have good understanding of finance and investment, and given the change in his personal circumstances, he considers himself to be more risk averse than in the past.

The recent events has made both Faisal and Sarah 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:

1. They realise that the earlier retirement date will reduce Faisal's pension expectations. You have been asked to consider the options Faisal 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 pension age and b) thereafter.
2. You are also asked to consider how Faisal's changed circumstance impact on Sarah's pension planning - what recommendations can you make in relation to her early retirement and to ensure she is financially secure for the future should Faisal die prematurely?
3. They have also asked whether there are any other steps they should take to help their children with the university courses and the house deposit, as well as their ambition of purchasing a holiday home, and ensuring their family's future financial security. The family expects a clear plan that outlines whether they can meet those objectives.

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 (for example: non pension investments and savings, equity investment and inherited money), and
• what provision they should make to minimise the inheritance tax implications in their pension strategies should Faisal and/or Sarah pass away prematurely.

Financial details are stated below.

Financial Details
Faisal Khan Bray 59	Sarah Khan Age 58
Role	Senior Engineer	Architect
Salary (pa, full time basis)	90,000	85,000
Pension (1)	Group Personal Pension (DC)	Group Personal Pension (DC)
Contribution	8% + Employer 8%	5% + Employer 6%
Fund Value	430,000	210,000
Pension (2)	Personal Pension (DC)	Occupational Defined Benefit (DB)
Current Value	145,000 (no contributions since 2004)	@ 5,000pa RPI index linked with 50% spouses benefit (left scheme in 2005) NRA 60
State Pension	34 years	30 years
Cash ISA	20,000 @ 1.5%	16,000 @ 1.7%
Investments	100,000 - Polar Capital Global Technology Fund
Bank Deposit (recent inheritance net of tax)		60,000 @0.5%
Home	750,000 market value joint ownership, capital and interest mortgage cost 1,400pm, repayments will finish in June 2026. Joint life first death term assurance -sum assured 240,000. Term ends 2025. Premium 60pm
Expenditure:
Monthly expenses	Estimated at 5,500 (excluding savings and holidays) Includes financial support provided to each of their children while at university of about 6,000pa. The total also includes monthly mortgage payments, council tax, bills, and any other reoccurring monthly living expenses.
Savings : ISA (per month)	Faisal, any balance left over each month goes into the Cash ISA	Sarah , any balance left over each month goes into the Cash ISA
Holidays	Approximately 7,000pa