The challenge
A former member of the armed forces received £500,000 in damages following a non-freezing cold injury claim. While the compensation recognised the impact of their injury, it also presented a new challenge: how to safeguard a substantial sum and ensure it supported both immediate needs and long-term security.
Like many veterans, the client had limited experience in managing significant financial assets. They were concerned about:
- Preserving the value of the award
- Generating sustainable income without taking unnecessary risks
- Protecting their family’s financial future
- Ensuring their affairs were in order in case of incapacity or death
Without proper guidance, there was a risk the damages could be eroded by inflation, poor investment choices or unforeseen tax liabilities.
Our advice
Our Independent Financial Advisers (IFAs) worked closely with the client to develop a comprehensive financial strategy. The approach was high level, designed to provide both security and flexibility. Key steps included:
- Capital protection and cash flow planning – setting aside sufficient funds for short-term needs while ensuring the majority of the award was safeguarded for the long term
- Balanced investment strategy – structuring a portfolio to generate sustainable long term returns, and an income, while managing the risks associated
- Tax planning – advising on efficient ways to reduce unnecessary tax exposure and protect the damages award where possible in an ever changing fiscal landscape
- Ongoing review – establishing a regular process to reassess financial objectives and adapt to any changes in the client’s circumstances
Our independent financial advice team worked alongside legal colleagues to address broader matters of personal protection. This included:
- Drafting a will to ensure the client’s wishes would be carried out
- Putting in place Lasting Powers of Attorney (LPAs) to safeguard decision-making if the client were ever unable to act personally
- Setting up a Personal Injury trust to protect the clients right to means-tested benefits, such as Universal Credit, and care funding.
The outcome
Through this integrated financial and legal planning, the client gained confidence that their award was secure, carefully managed and aligned to their long-term goals. The outcome provided:
- Careful management of the £500,000 damages award
- Sustainable income to meet living costs and family needs
- Assurance that their affairs were legally protected through wills and LPAs
- Peace of mind that their financial plan will be monitored and adapted as circumstances evolve
Conclusion
A damages award of this size can transform a veteran’s life, but only if managed wisely. By taking early, independent financial advice, this client avoided the risks of unmanaged capital and instead achieved a secure, sustainable future for themselves and their family.
