Now you have a few years of earnings under your belt and your salary is rising, you can consider using some disposable income to work harder for you. You are likely to be considering buying your first house, investing for growth and reducing the tax you pay. Adam Hughes, Independent Financial Adviser, explains what we can do for you during this stage:
During stage 2 of our 'four stage approach to regulated financial advice for sports professionals', we consider the following:
As your body is your work tool, if you can’t play then you aren’t able to earn. So with this being one of the biggest and most important areas for professional sportsmen/women we will break this down to your specific needs at the time. With so many complex insurances on the market it is important to use a financial advisor to make sure you get the right policy for you. It may be that you are just in need of an Accident & Sickness Policy or if you require a higher level of protection, we can look at Life & Critical Illness as well as the options available for Career Ending Injury Insurance.
The higher your salary the more tax you will inevitably pay, so we can look at ways of reducing your tax bill and providing you with the opportunity for tax free capital growth at the same time. Depending on personal circumstances and profile we can look at investing into Enterprise Investment Scheme (EIS) / Venture Capital Trust (VCT) schemes which will provide a 30% tax relief on the amount invested.
If you have either a lump sum or would like to pay a monthly amount there are plenty of opportunities for all risk profiles. You could pay into a Stocks & Shares ISA for the tax benefits available or invest directly in Bonds and Equities depending on what your financial goals are. You could also look to produce a tax deferred income from your investments by way of an Investment Bond.
For those who would rather their money be more accessible or have a lower risk profile there is always the option to put your money into savings. There is the Cash ISA which provides a tax free return or you could put a regular amount of money each month into a Savers account and receive interest. We use a sophisticated range of tools to help find you the best cash rates in the market.
With the workplace pension now in effect we can evaluate what you are paying into it each month and the benefits available of setting up your own personal pension plan. Pensions have very favourable tax advantages, especially high earners as you will receive tax relief at your highest marginal rate on contributions to your pension. At Niche we have specialised in pensions for a long time and will provide you with a whole of market approach to finding the best option for you. This includes pre existing pension arrangements as well as overseas players.
The higher your profile becomes the likelihood of having the opportunity to set up your own Image Rights company increases. Professional sportsmen/women have used this to either promote or restrict the use of their image. There are tax advantages available to having your own Image Rights Company as long as the company is set up with the correct financial and legal advice.
If you are now looking at purchasing a home we can discuss the current mortgages and rates available. During your career while your earnings are high you may want to overpay your mortgage to reduce the term, so we can take this into consideration when searching for lenders.
Please note: your home may be repossessed if you do not keep up repayments on your mortgage.