Securing retirement income for Edward & Catherine

Edward knew that he didn’t want his pension income to depend on stock market returns but felt overwhelmed by the information he had received from his various pension providers.

We were approached by Edward, the 62 year old friend of one of our long-standing clients. He asked for our help in sorting out his pension, in particular the mass of paperwork he had recently received from his pension providers. He had contacted them by telephone stating he had now retired from his business and would like to draw his pension. We arranged to meet at his home with his wife, Catherine, to discuss their requirements.
 
What they wanted to achieve

• Edward had just stopped working and wanted to understand his options for generating an income.
• He had a number of private pension funds and other types of investments such as ISAs.
• He had received various ‘retirement packs’ from his pension providers and was overwhelmed by the huge number of ways he could access his different pensions.
• He was nervous of relying solely on future investment returns for his income.

 
Our initial recommendations and actions

• We reviewed the information he had been sent and explained the options open to him.
• Given his individual circumstances, we recommended that he purchase an annuity with his pension funds.
• We carried out a comprehensive review of his other investments and created an investment portfolio that is aligned with his appetite for risk and provides a ‘tax-free’ income stream.

 
Edward and Catherine now have:

• A better income stream: Edward is a smoker and, like many people of his age, has minor health issues. Therefore it was possible to obtain an annuity (an income for life) that provides an income 20% higher than that available from his pension providers.
• Security and peace of mind that the annuity income is not subject to the vagaries of future investment returns.
• Flexibility: the tax-efficient income stream from their non-pension investments can be adjusted up or down to suit any change in their circumstances or requirements.

 
Please note that although this story is based on a real client, we have changed their name and aspects of their personal information to protect their privacy and identity.

16 January 2024

 
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