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Bloomsbury discusses the various observations and conclusions with Sophie, to identify how she feels about the available options.

After discussing the pros and cons of the various planning alternatives and considering the overall position, Sophie and her Bloomsbury planner formulate the overall financial plan incorporating the following main points:

• Sophie should create an enduring power of attorney, to allow her sister to deal with her affairs in the event of incapacity. It would also be sensible for her sister and brother in law to have such arrangements.
• She repays her mortgage on the Spanish property with cash from her deposit account to obtain a risk-free, tax-free return equal to the interest saved.
• Although she need not make further pension contributions, since they are extremely tax-efficient and the funds fall outside her estate on death, it is worthwhile to maximise them prior to April 2006 by paying the maximum possible. The most suitable for this would be the uncapped unit-linked retirement annuity so she should make use of this.
• After April 2006, she ceases to make pension contributions and should then look to build up non-pension assets for greater flexibility.
• She should transfer all the pensions to a self-invested structure to permit more control over the asset allocation, access to pure asset class funds, lower costs and the strategy to be integrated with that for her other assets.
• Once the relevant pension simplification legislation is passed, she should seek to ring-fence the existing pension fund as it exceeds the proposed lifetime limit.
• She should make a will.
• She could establish an accumulation and maintenance settlement for her nephews, which can be used to fund their education costs in a tax-efficient way.
• She will consider establishing a discretionary trust, of which her sister and children could be beneficiaries.
• She restructures her investment portfolio to create greater diversification, using derivatives to manage the risk of the shares until the holdings can be reduced. The balance is altered to include a larger proportion of lower risk assets such as fixed interest compared with the previous high equity content.