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Case Studies

Phillipa Kilby

Age - 45

Do you have savings, if so what type, where, how much, how often?

Currently only my pension and a small amount in NS&I (post office premium bonds).

What are your investment objectives? What are your short term horizons?

For detailed information see below

What is your attitude to risk?

Medium to Low

What do you know about Retail Bonds?

Nothing until a friend explained them recently.

Do you have a financial adviser to help with your financial decisions?

Yes, however mainly linked to my mortgage.

My Investment story

In my 20’s I purchased my first property, a 2 bedroom flat. Although the mortgage was only £65k it was 100% to value (easily obtained back then), This was the late 80’s, and the mortgage rate was well over 12%. I wanted the minimum outlay, so contracted out of SERPS and did not take on the Company share scheme (which typically soared the following year!) Although my apartment dipped into negative equity, I managed to sell it with a slight profit.

Once in my 30’s the profit from my flat and my change of career meant I could afford a 2 bedroom cottage. I was head-hunted, and started to earn well, taking my salary into the high tax bracket. I was still struggling financially, living the ‘work hard play hard’ ethic and I ignored the advice of my financial advisor and continued with my ‘interest only’ mortgage with minimum life cover and not much else! The 'no pension, no saving' approach

A few years later I sold my cottage with a relatively high equity, and moved to the south coast with a new career, and I took note of my finances. My bank contacted me regularly – my equity from the sale of the cottage was sitting in my current account not doing much at all. I decided to take my banks’ advice, and put about half of the sum into an ISA, although I hated the fact I was unable get to it if I wanted to without penalties. 

With another new job, came the opportunity of Company Shares, which this time sensibly I did contribute to, and also the Company Pension Scheme, which was obligatory. I went on to purchase a new home about a year later, and my new financial advisor was hot on my heels to ensure I was aware of the best investment. However with nearly all of my equity eaten up with the deposit on the new house, there was little left. I put a small amount into NS&I via the Post Office (which are still there)

Mr Bond says... "I want something that is likely to give me return, with low-medium risk, and which isn’t tied up for years on end."

In recent years, my Company Pension Provider has changed, and I am now on Salary Sacrifice, which means I earn slightly less per annum but the company I work for offers a generous contribution, and having been there for almost 12 years, the Pension is accumulating well, which gives me some confidence for my retirement. I have also saved some of my quarterly sales bonus over the past couple of years, and therefore have some savings to invest. I want something that is likely to give me return, with low-medium risk, and which isn’t tied up for years on end. I realise the rate will be lower unless the investment is longer, but I would rather that than penalties for early withdrawal.

I only heard about Retail Bonds recently and am very keen to know more, as I feel this would be a good rate of return in the current economic climate, fairly low risk, and there are some solid companies offering them.

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