Wealth Check: 'I am a jazz fanatic so it's time I faced the music'

Solution 4: Record label

Tim Whitehead was training to be a barrister 27 years ago, but gave it up to become a jazz musician. "I was three months into my pupillage and was balancing my studies with writing and playing music," the 52-year-old saxophonist says. "I needed to make a choice since it was too hectic doing both. But I wanted to understand more about music."

Mr Whitehead has had a long and varied career as a jazz composer, performer and teacher. He holds jazz workshops at the Weekend Arts College in Belsize Hill, north London. He is also proud that the classes draw children from a wide range of backgrounds.

He regularly plays with The Personal Standards Quartet, and his sextet, TW6. Another project is The Homemade Orchestra, run with his friend, Colin Riley. They will be performing in the Purcell Room in the South Bank Centre as part of the London Jazz Festival on 23 November.

Mr Whitehead says professional jazz musicians have to be realistic. "In the time I've been playing the scene has changed dramatically. Lots of fantastic young players are coming up and the standard of playing has gone up. But there's huge competition for gigs and even the larger venues don't pay much. And there's little media presence for jazz. Students are coming from the music colleges and if they are going to earn a living from playing they will have to be very versatile."

For the tax year ending April 2002 Mr Whitehead made £6,000. He lives in Richmond, Surrey with his family, renting a house from Richmond Parish Lands for £458 a month. His wife Linda, 48, works part-time for Parents for Inclusion, and they have four children.

They have £3,000 in an Isa, but no other stocks and shares. Mr Whitehead has no pension except for royalties from his compositions on albums. Another potential source of revenue is Home Made Records, Mr Whitehead's own label. He would like advice on how to expand the business. "My plan is to do what I do best, earning a living, playing, recording and teaching music," he says. "I want to contribute to a more peacefully creative world."

We put his case to Ben Yearsley, of Hargreaves Lansdown, Gillian Cardy, of Professional Partnerships, Steve Martell, of Martell Investment Management and Nick Breton, of The MarketPlace, at Bradford & Bingley.

TIM WHITEHEAD, 52, JAZZ MUSICIAN

Family: Married to Linda, 48; four children: Maisie, 19, Hattie, 14, Sonny, 8, and Fionn, 6;

Education: Degree in law, Manchester University;

Car: Renault Savannah Estate;

Debts: Building society current account, £1,200 overdraft;

Savings: £3,000 in an instant-access Isa;

Property: Renting in Richmond, Surrey;

Outgoings: (Per month): Water £35; phone and internet £95; insurance £45; electricity £33; gas £24; post £20; printing, publicity etc £25; union dues, other memberships £15; £458 rent.

Solution 1: Savings

Mr Yearsley says the Whiteheads should cash in their Isa to pay off their overdraft and credit cards. He says there is no point earning 4 per cent interest on a cash Isa and paying a higher rate of interest than that on debt.

Mr Martell says the key for Mr Whitehead is to make his money go as far as possible. Retaining some funds in the instant access Isa is sensible in case he needs money quickly. He must make his savings work as hard as possible and he should shop around for the best rate. Kent Reliance offers 4 per cent on its instant-access, mini-cash Isa on a postal account basis with yearly interest.

For an internet or phone-based service, with monthly interest, Intelligent Finance is offering 3.9 per cent at present and will guarantee to pay at least 0.3 per cent above base rate until April next year.

Ms Cardy says the Whiteheads should make an attempt to live within their means and avoid debt. They should move their bank account to one with the cheapest overdraft rate and transfer debt to a credit card with a zero rate of interest on balance transfers, and continue to switch each time the introductory period expires.

Solution 2: Pension

Mr Breton says although Mr Whitehead has left it very late to start a pension it would still be worth him and his wife acquiring one. He advises a stakeholder pension for each, as they are inexpensive, have charges capped at 1 per cent per year, and are very flexible.

You can stop, restart or vary your monthly contributions. You can also start saving from as little as £20 a month, up to a maximum of £3,600 a year, including tax relief.

Mr Martell says the Government has recently replaced the minimum income guarantee with the pension credit. This is to help pensioners on low incomes and ensure couples over 60 have a weekly income of at least £155.

The key to building a portfolio of pension income is likely to be how successfully Mr Whitehead markets himself and his skills as a musician.

If successful, he will develop additional sources of income that will help not only towards retirement but improve the quality of life. If unsuccessful, the safety net of the Pension Credit will be important to him.

He adds that Mr Whitehead has the ability to continue working almost indefinitely, as long as he is fit enough to thrill people with his skills. He may not need to retire at 65 and a large proportion of his retirement income may come from him continuing to earn as a performer.

Ms Cardy says Mr Whitehead should be making national insurance contributions at the full rate to ensure he receives the maximum state pension at 65. He should request a state pension forecast to ensure he is not missing the opportunity to make additional voluntary contributions to maximise his position. They may find that when they reach state pension age, they will be eligible for the pension credit, assuming that this is still in place.

Solution 3: Property

Mr Breton says owning your own home gives you security as well as a valuable investment, but if Mr Whitehead wanted to take out a mortgage it would not be straightforward because the standard 25-year term would take him over the usual retirement age.

But he could go on working past the normal retirement age so this would not necessarily be impossible.

Mr Martell says Mr Whitehead appears to be spending a high level of his income on rent but he is unlikely to find a cheaper rented option. His ability to purchase a property will be severely limited by his income. This makes buying a home unlikely. He should focus on building his income rather than buying a property.

Mr Martell says Mr Whitehead's local business link will be able to put him in touch with suitable specialists to help develop his record label. The internet is an ideal medium for marketing the label and Mr Whitehead's availability for gigs should provide an easy and instant way for him to showcase his talent.

He could even enable visitors to his website to download sample sound recordings. He should work with a web designer who will develop a site free in return for a share of revenue.