Seventy years of saving up – top financial tips for ‘thoroughly modern Lizzy’

Not everyone is born into wealth, and a more ‘modern Lizzy’ – fresh from university, in her twenties, about to start a graduate programme – will face different life decisions today than when her royal namesake started her first ‘proper job’ seventy years ago.

Here, Laura Newman, Head of Specialist Advice and Investment Services, NatWest Premier gives top tips on how Lizzy can achieve her financial goals over the next seventy years.

Twenties – plan for the present: now is the time to lay down the foundations for the future and get into good habits. Maximising her pension contributions and taking advantage of her employer’s matched contributions. Paying off any student debt as her income increases and using the tax efficiency of an ISA or Lifetime ISA is also a good idea.

Thirties – plan for bigger goals: Lizzy paid in £4,000 a year into her Lifetime ISA and the government will top this up by 25 per cent, so that will help with her house deposit. A financial adviser can help map out key financial and life milestones and advise on the importance of things like having the right life insurance products in place.

Forties – plan for others: With her children’s futures to think about now, it’s important to diversify her savings options – an easy-access savings account, a tax efficient stocks and shares ISA and a Junior ISA will help with short, medium and long-term savings goals. Now is also the time to take a closer look at her pension. Recent pensions freedom means there is a good reason for her to maximise her annual pension contributions. The up-front tax relief provides an efficient way to preserve and help grow her money for later life and pass on the benefits to her loved ones. This is also a good time to make a will to ensure her family is financially secure in the future.

Fifties – plan for retirement: now is the time to start thinking about retirement. Other factors to think about are costs that may arise in later life, such as helping her children with university fees or paying for the care of her elderly parents.

Sixties and seventies – plan for enjoyment: Even after drawing some of her pension to repay her mortgage it’s possible for Lizzy to continue to contribute and receive tax relief. Lizzy could also opt to consolidate her various plans into a single scheme to simplify her arrangements. She is also thinking about her succession planning and considering whether she can give up access to some of her assets which would allow a more tax efficient transfer of her wealth to her family whilst retaining some input and control. It would be wise here for Lizzy to seek inheritance tax planning advice.