Our clients / Mike and Mary

Couple wanting to ensure a comfortable retirement

The challenge

Mike was 59 and had had enough of working long and stressful hours. He and his wife Mary wanted to spend more quality time together and knew they wanted Mike to retire when he was 60 – and to enjoy an ideal income of £40,000 per year.

With pensions, Mike had two options: to keep a work pension that would pay him a regular and increasing income for the remainder of his (and Mary’s) life, or to take a transfer value of £650,000 and invest this into another pension instead – and he was keen to do the latter. He also had another personal pension of £130,000, and £100,000 in cash. Mary had a couple of small work pensions and was expecting an inheritance within the next couple of years.

Our solution

As Mike had a defined-benefit pension that needed a transfer analysis, we undertook a detailed and comprehensive review of the benefits and drawbacks of taking the transfer value versus a guaranteed income for life. This detailed analysis was carried out in conjunction with an in-depth evaluation of all the couple's other savings, investments, pensions, and future cash flows, together with their objectives, attitude to risk, and current and future lifestyle requirements.

The outcome was that Mike and Mary did not need to transfer the defined-benefit pension – they could use the guaranteed money the existing pension provided to help guarantee a regular income for the rest of their lives. We advised on both how much of the couple's cash should be invested and how to optimise its rate of growth; we also helped increase the tax efficiency of their portfolio.

Mike’s second existing pension was moved to a different provider, reducing charges and giving him access to a better investment fund. This capital will be used to provide him and Mary with both a tax-free lump sum of money and an income that will support them until their state pensions and work pension commence at age 65.

The benefits

Mike can now afford to stop work when he’s 60. He and Mary will have the ideal income they want and get to live the kind of lifestyle they want to enjoy. They now have the peace of mind that having a guaranteed income for the rest of their lives brings, and have also obtained additional income, tax efficiencies and flexibility via the use of their other assets.

Further case studies

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