A comprehensive plan to restructure finances

Although the couple had a manageable mortgage and a combined monthly net income of £4,700, they had not been managing their finances efficiently and didn’t consider they had enough disposable income to fund the school fees.

The capital for their mortgage of £120,000 was to be paid by endowments which were performing badly. The couple also had credit card and car loans in excess of £22,000.

1. Restructure finances to allow school fees to be affordable
2. Create an emergency access fund for fees
3. Arrange a suitable and comprehensive school fees insurance protection plan

We recommended they surrender the endowment policies to repay their loans and fund the first two years of school fees. A repayment mortgage would replace the endowment mortgage and alternative (cheaper) arrangements made to protect the mortgage and (additionally) the school fees.

Removing the credit card debt and taking out a secured loan for school fees also made a significant saving as the interest rate was low and the cost could be spread over a longer period.

By restructuring the client’s financing, school fees could be funded and guaranteed via a protection scheme and the shortfall in their mortgage addressed without having to allocate any new funds. The savings predicted would leave the couple £60 per month better off.