Liquid assets are normally used only when needed to supplement income in the cash flow

Using Liquid Assets to Supplement Income in the Cash Flow

Voyant will work out most of the future cash flow for you, if you let it. If annual income doesn’t fully meet planned expenses, the software will automatically top-up income from liquid assets in order to prevent potential shortfalls in the cash flow, provided you place no withdrawal limits on these accounts.

Liquid assets include:

- Cash accounts (savings and current accounts),

- Cash and Stock Market ISAs,

- Unwrapped investments,

- Offshore taxable accounts,

- Onshore and Offshore Life Funds.

 

Even tangible assets (entered on the Property/Assets screen) could be set to be liquidated automatically if needed to prevent future shortfalls, provided that the property is not one’s primary residence. We don;t generally recommend doing this as selling a property would usually need to be an informed decision requiring actual planning, but to make a property/asset available for ad hoc liquidation, you must set its Advanced Settings > Liquidation setting to “When Needed”.

Ad hoc withdrawals can also be made from child trusts in order to fulfil expenses, provided that the child is the owner or a co-owner of the expense and is at least 18 or older when the expense is incurred.

Other types of accounts have special rules or tax treatments are therefore never subject to ad hoc withdrawals.

 

Ad hoc withdrawals are never taken from:

- Drawdown Pensions (except for when drawdown income is set to be taken “as needed”),

- Trusts (other than Child Trusts and only in certain circumstances, see above),

-  Enterprise Investment Schemes (EISs),

-  Venture Capital Trusts (VCTs),

-  Discounted Gift Trusts (DGTs).

 

To draw funds from these accounts, you must set a planned withdrawal, which in the software we call a draw down strategy

 

How to Distinguish Ad Hoc from Planned Withdrawals in the Cash Flow Chart

As you examine the Cash Flow chart in its detailed view (by selecting Details top right of the chart), ad hoc withdrawals can be easily distinguished from scheduled withdrawals by their colour coding. Planned withdrawals are shown in a different colour from any ad hoc withdrawals taken by the software to help fulfil expenses.

 

Tip: In many client cases you may notice that in the later years of the cash flow, after retirement, as your client becomes more reliant on assets rather than income to meet expenses, withdrawals from savings and investments conveniently meet the top of the black need line. The need line represents your client’s total annual taxes, expenditure, and any planned savings and investments are being met successfully in that year of the plan. These inflows are ad hoc withdrawals taken from liquid assets as the software automatically tops up income to work out the annual cash flow.

 

Further details about withdrawals can be viewed by double clicking any bar/year of the chart or selecting Year View (top right of the chart). The chart details will display. Withdrawals and any withdrawal limits placed on accounts can be seen on the Investments and Pensions tabs, in the Withdrawals column. Click on the name of the account to see more information.