Cash flow planning has become a fundamental tool within the professional advisor community. Designed to lower financial stress, it allows the individual to anticipate trouble by creating a ‘cash flow cushion’ for unexpected expenses, thus providing a steady roadmap for the future.
It is an effective way for advisors to determine the sustainability of a client’s income over their lifetime to protect income levels. For those in retirement, who look for certainty when planning for their future income needs, a forecasting strategy such as cash flow planning is crucial.
Impact of “Pension Freedoms”
Use of cash flow planning tools have increased significantly since “pension freedoms” were introduced by the Government in the Spring Budget 2015.
The new pension rules brought sweeping changes to the way that pensions are taxed and have enabled individuals over the age of 55 to make their own decisions about how to fund their retirement.
Before pension freedoms were enhanced the majority of investors were faced with the limited option of buying an annuity. The new rules have since triggered a variety of new investment options. And whilst this has led to greater choice and opportunity, income has become more exposed to fluctuating market forces.
Forecasting for the future
Investors look to target returns that allow them to maintain and improve their current lifestyle into the future. Many will subsequently look beyond the marginal returns they can get from cash investments, which do not keep pace with inflation.
However, in order to achieve a more lucrative yield, it is likely that investors will have to take on a higher level of risk. Volatility and the prospect of a reduction in investment value due to lower than expected returns, can lead to concern in the minds of clients.
The wise investor will instead seek to minimize risk as much as possible without diluting the potential rewards. They will target a strong level of security and yield (in excess of cash) for a fixed term.
One such investment is the Income Service from Triple Point; a London based investment management business with a strong track record of providing stable investments.
Triple Point Income Service
Triple Point’s Income Service generates attractive fixed returns by providing funding through a single holding to thousands of carefully-vetted UK businesses.
The service is engineered to generate a predictable income stream which is uncorrelated to traditional equity and bond markets.
Investors benefit from Triple Point’s extensive experience as an investment manager in the Direct Lending sector. Funds raised are used to provide loans, leases and other asset finance to a large and diverse range of UK SMEs. As a leader in the private debt market, Triple Point currently manages over £350m of assets in lending and leasing strategies and has provided funding for over 100,000 businesses.
If you are looking to build a balanced investment portfolio that provides clients with dependable returns over a fixed term along with security that exceeds mainstream investments, including direct investments or equity funds, the Triple Point Income Service could be considered for part of the client’s portfolio.
Risk Warning: As with all investments, the Triple Point Income Service places capital at risk. Investor’s may not get back the full amount invested, and interest is not guaranteed. We do not provide investment or tax advice. Tax treatment will depend on your individual circumstances and may be subject to change in the future. Please speak to a financial adviser, who can guide you if you are in any doubt. Investors should only subscribe to the Triple Point Income Service on the basis of the information and terms set out in the Information Memorandum and Investor Agreement.
Triple Point steps up support for the NHS
Long after this crisis has passed, memories of the inspirational work undertaken by our incredible p...
Working through the pandemic: TP and our portfolio companies
At Triple Point, we’re proud of the initiatives our portfolio companies have launched to help ...
A blueprint for impact investing
We are living through unprecedented times as a result of the Covid-19 pandemic. Businesses, economie...