Liquid Millionaire - isaco

Stephen Sutherland
Getting back to the case studies, notice that as each client gains age,
their Tax-Free Savings pot tends to rise. In other words, I fi nd that the
majority of my clients aged 50 upwards have large pension and ISA
portfolios and with many of them being business owners, their pension
is either in a SIPP already or they have the ability to turn it into one if
they want to.
It is good to know that all personal and private pensions can be turned
into a SIPP.
And just so that you are aware, when a person is an employee of a
company, and has a company pension, this type of pension can’t be
turned into a SIPP.
Th at is why most people who take out a SIPP are either self-employed
professionals or business owners. Th e only exception to this rule are
people who have deferred or frozen pensions–ones that have been built
up from previous employers–as these can also be turned into a SIPP.
If you are unsure, speak to your adviser and ask them to explain in plain
English what a SIPP is and how they work.
Moving on, before we look at some projections, to simplify things, we
named the combination of my clients’ ISA and SIPP money, Tax-Free
Savings.
For example, in case study three their tax-free savings are £650,000. Th is
£650,000 could have been made up from say £500,000 in a pension and
£150,000 in ISAs.
It is now time to show you how your money would grow if it was returning
small rates of percentage growth and also what impact larger rates of
return would have on it.
Let’s start with case study number one.
We will begin with taking a look at what happens to each couple’s fi nances
if they were growing their wealth at 6% per year over the next 10 years.
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