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Personal Injury Award

Personal Injury Award

How can I best use the proceeds of my award to replace my earned income over the long term?

Client Circumstances:

  • Mr A Ward is 56 and married.
  • He owns his own home outright.
  • Mr Ward lost a limb in an industrial accident.
  • He can no longer work and has lost income.
  • Mr Ward is in receipt of non means-tested benefits.
  • He has an income/expenditure shortfall of £16,000 pa.
  • Personal Injury award - £520,000.

Recommended Solutions:

  • Set aside £40,000 for home modifications.
  • Set aside £20,000 for new car.
  • Set aside £40,000 for emergency/rainy day fund.
  • Set aside £45,000 on cash deposit to meet income shortfall until State pension commences.
  • Invest £375,000 in balanced and diversified portfolio.
  • Maximise ISA allowances, each year from within portfolio for Mr and Mrs Ward.
  • Approximate income from portfolio £11,100 per annum.
  • Discuss with solicitor suitability of using a PI Trust.

Benefits from advice given:

  • Income shortfall between now and State pension met.
  • Portfolio provides for capital growth potential.
  • Portfolio provides for growing income.
  • Hedge against inflation.
  • Gradually improving tax efficiency and so further increases in net income.
  • Provides flexibility to adapt to changes in circumstances.
  • Provides access to capital at all times.

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Future Servicing

We will look to carry out a regular review of your circumstances, objectives, needs and portfolio performance to ensure all arrangements continue to be suitable and advise of any changes that may be appropriate.

This example is for illustrative purposes only, based on current legislation and tax allowances. Tax rules and regulations are subject to change.

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