UnaVida | Financial Planning Manager | john


I asked John how long he had been a taxi driver.

Three years, he said, although he previously drove taxi’s in the 70’s.

So, I asked him, what happened in between?

He told me that he ran a large transport company for many years, unfortunately, the margins were low and one year his company suffered a large bad debt.

He lost everything as his bank had asked him to sign a personal guarantee on the loan to his business.

I have heard similar tales many times over the years.

If you run a business, you need to speak to someone who understands what needs to be put in place to protect your business and family. Who understands accounts and taxation and also has some legal and financial planning knowledge. Someone who can provide the comprehensive financial planning input that a business owner needs. Someone who can connect all of the dots.

John should have received advice before he signed the personal guarantee:

  1. is there any alternative to taking a loan?
  2. is the business viable? If not, why take a loan, as you are only postponing the inevitable
  3. could John have converted his pension plans so that a loan could have been taken from his own pension?
  4. if there was no other alternative then John should have been advised how to limit the financial downside of the personal guarantee? This is something that we do, for our clients.

If you think that this does not apply to you, think, think again, and again.

Finally, John turned to me and said, you know this week I would have made the final payment on the house.

That really hit me.

I have thought about little else, since my chance meeting with John. A nice man let down by a lack of advice.

What I didn’t do during our brief discussion was to enquire about the effect on his marriage, I didn’t have to, it was etched on his face.

I felt John’s pain.

If you think that this does not apply to you, think, think again, and again.

Almost all the business owners I meet believe that it will never happen to them, it is good to be optimistic about life – but it is also sensible to have a safety net around both your business and your family.

If one of your Directors falls ill, or has an accident, or dies – how would this affect the company both operationally and financially. Of course, a catastrophe may not occur, but if it did, then sod’s law dictates it would happen at the worst time for the business.

Yes, there is a cost to setting up shareholder or partnership agreements.

Yes, there is a cost in drafting and executing wills and trusts for your family.

Yes, there will be a charge for advice.

Yes, you do need Lasting Powers of Attorney.

Yes, it is easier to do nothing, maybe you will strike lucky, maybe you won’t …


What sort of cost might you and your family have to pay without these arrangements?

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A pension is a long-term investment that typically cannot be accessed until age 55 (57 from April 2028). The level of pension benefits offered could change depending on the value of your investments (and any income they may generate).

The interest rates in effect at the time you begin receiving benefits may also have an impact on your pension income. The tax consequences of pension withdrawals will depend on your unique situation. In later Finance Acts, tax rates, tax bases, and tax relief may change.

The opinions expressed by Ray Best are meant to inform and educate. Before making any investment decisions always take advice that is pertinent to your investment personality and financial situation.

You are aware that past performance will not necessarily be repeated in the future, but you should be aware that persistent poor performance invariably will.

The value of an investment and the income from it could go down as well as up.

The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

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The guidance in this website is primarily aimed at a UK audience and is subject to regulation by the Financial Conduct Authority (FCA).

The Financial Conduct Authority does not regulate tax planning, estate planning, or wills and any form of legal documentation.