Creating a thorough pension and retirement planning strategy

Background

Harriet had several pensions which she had accumulated during her working life. As a business owner, she found that she had taken her eye off her own retirement provision.

Harriet contacted us for help. She had six pensions and didn’t know what they would provide, nor how she could access them.

We agreed to review each of her pensions and provide her with an independent report; we’d also analyse her current pension provision and establish what she needed to do to get back on track to achieve her goals.

What did we do?

Upon examination, we found that Harriet’s pensions were ‘old’-style pension contracts; her only option at retirement was to either have a fixed annuity for life or a full return of the pension fund subject to tax. None of her existing pensions offered any of the new pension income flexibilities recently introduced.

Harriet had previously found administering six pensions difficult. We discovered that combining all of her pensions into one single new contract was no more expensive than the fees she was currently paying across all of her existing contracts.

A new pension contract would also offer positive pension income features, which included allowing her daughter to benefit from Harriet’s pension in the event of her death; something her existing pensions did not offer.

Seeing as Harriet had not made a pension contribution for many years, we calculated the maximum pension she could make was £160,000. This was paid as a company pension contribution saving her business £32,000 in corporation tax. This significantly boosted Harriet’s pension savings; we were then able to suggest a regular monthly pension contribution of £1,000, which put her on track to achieve her income in retirement goals.

The results

Harriet is pleased with the new set up of her pensions: she now has just one contract, significant death benefits and a strategy in place to boost her pension savings.

Her plan will be reviewed each year to ensure she remains on track to achieve her goals. We will adjust the plan along the way to account for any changes in inflation, investment returns and taxation.