Case Study  /  Retirement Planning

"I have just been made redundant and being realistic feel it is unlikely I will get another job because of my age. I have contacted my pension providers but I am totally bewildered and confused with the information and paperwork they have sent me."

John was referred to us by one of our longstanding clients. He is 62 and this is the second time he has faced redundancy in the last 8 years. His wife Sally is 61 but is in poor health. Ideally John would like to spend more time at home with her but is concerned that his pension funds will not cover their monthly expenditure. He believes they need approximately £25,000 a year for a comfortable lifestyle.

Sally is already receiving a pension from a final salary scheme and gets £6500 gross per annum. John has a deferred final salary scheme from past employment and 3 personal pensions with different providers.

They have savings in a number of deposit funds, ISA's and two investment bonds written in joint names and were happy to consider creating income from these investments if necessary. John would also consider part time work to bridge any shortfall.

John has written to the insurance companies regarding his pension policies but finds the paperwork complex and confusing. His final salary scheme would pay him a tax free lump sum and income of £9500 per annum. This payment will escalate each year at the pension trustee's discretion. Sally would receive 50% of this pension should John predecease her.

We researched John's pensions for him and explained in simple terms the options he had with each pension fund, outlining the advantages and disadvantages of each option. We explored the benefits of purchasing an annuity and explained the risks associated with income drawdown.

We suggested they both get a state pension forecast, something they had been meaning to do for some time.

Once John and Sally had all the facts and figures in an understandable format they were able to make plans for the future, safe in the knowledge that they would be able to afford a comfortable retirement.

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