Paul is a senior executive. He was making large payments into his pension but hadn’t realised that he was considered a high earner for pension purposes. Had he maintained these contributions then he would have been liable to tax penalties for exceeding his annual pension allowances.
With this in mind, we helped Paul review his retirement plans
Although he had been paying into a pension for a while, it transpired that Paul had not put much thought to his retirement. So first, we worked with him to establish when he would like to stop working and what income he would need at the time. We also helped Paul establish his own attitude to taking investment risk. We then used cashflow modelling to review his current assets and future sources of income and it became clear there was likely to be a shortfall.
With retirement goals in place, we reviewed Paul’s existing pension provisions
Firstly, we discovered that Paul held some older personal pension schemes that were not being actively managed. They did not offer appropriate investment choices or access to the flexible retirement facilities he needed to meet his retirement goals. We also found that he had significant final salary pension entitlements from previous employers, which had not been reviewed since he left.
With a clear understanding of Paul’s circumstances, we put a strategy in place
We provided him with a number of options tailored to his new retirement goals. Paul decided to retain his final salary schemes as they offered a good foundation to his retirement income. We consolidated his other pensions into a single, more modern arrangement – offering a better selection of investment options with the flexibility to make changes as and when his circumstances change. Finally, we reduced his pension contributions to avoid tax penalties and suggested other tax-effective strategies to help Paul bridge the shortfall.
Having made these changes, we now manage Paul’s retirement portfolio. We provide him with regular guidance and updates. We also meet regularly to review his progress and suggest any refinements to his retirement plans as Paul’s circumstances or the savings market evolve.