Gillian Osborne knows first-hand the financial difficulties many people face when they lose a spouse.
“Obviously it is such a difficult time emotionally, the last thing you feel equipped to deal with is sorting out complex financial issues,” she shared. “There were tax issues to address, as well as sorting out an appropriate investment strategy.”
Osborne’s late husband, Gordon, had largely taken care of the couple’s savings and investments while she dealt with the day-to-day household finances.
She said the help of her adviser from Strategic Solutions Chartered Financial Planners was invaluable.
“Our adviser Michael had initially advised myself and my husband, and helped us draw up our wills. But he was then on hand to help sort through the tax complexities as well as being able to advise me on what I should do with this investment portfolio.”
She was encouraged to include her son and daughter in these financial decisions.
“My husband Gordon was very clear that he wanted to use some of our savings to help our three grandchildren. We’ve never had huge amounts of money, but the fact that Gordon saved regularly and invested sensibly means that there are now resources to be able to do this.”
Maximising Allowances to Minimise the Tax Bill
Not all of Osborne’s investments sit inside a tax-efficient wrapper, but she plans to transfer assets into her ISAs with each new tax year’s allowance, which will enable her to draw a tax-free income at a later stage.
Selling these shares and funds and repurchasing them within an ISA wrapper will trigger a capital gains tax liability so she is working with her adviser to ensure this is done as tax efficiently as possible.
Decent Dividend Players
The portfolio that her husband built up is invested in both funds and direct shareholdings. These include stakes in a number of large blue-chip company shares, including his former employer BAE Systems (BA.), and SSE (SSE) and National Grid (NG.).
All are decent dividend players, useful for when Osborne wants to draw an income from these investments.
Morningstar analysts remain positive on the outlook for BAE Systems - one of the largest defence contractors in the world. The stock is currently trading at less than its fair value, according to Morningstar equity analysts.
According to Morningstar, BAE is experiencing strong sales outside the UK and US markets, and it retains a strong position in new developments such as the F-35 fighter jet programme.
Morningstar analysts have a similarly optimistic view of SSE, pointing out that SSE’s management has recently reaffirmed its target for a full-year dividend increase, by at least inflation.
“I Don’t Want to Make Day-to-day Investment Decisions”
At 66, Gillian says she is following a ‘balanced’ approach to her investments and is looking for a combination of modest capital growth, plus income.
She says regularly meeting with her adviser keeps her informed of what is happening with these investments; “I want to be involved but don’t want the hassle of making day-to-day decisions on which share or funds to buy or sell.”
Currently the bulk of her income is from her husband’s pension, but she will look to supplement this with an income drawn from her investments at a later stage.
“It’s so important that you get an adviser you can trust and can rely on,” she said.
As well as her own finances, she is also involved in overseeing the finances of the charity Ryde Inshore Rescue that her husband set up more than fifty years ago, which helps fund a lifeboat service on the Isle of Wight.
“I’ve been involved as the treasurer since 2000,” she says. “Initially the charity operated from a beach hut, but over the years we’ve helped to raise the funds to ensure it now has a proper headquarters - the new floor of which will be opening this year.”
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