What to do when approaching retirement age with a suitcase full of pension plans and ISAs

Mr and Mrs Williams came to us for a financial health check on their pension plans

Mr and Mrs W were referred to PML Financial Services by an existing client approximately 2 years before Mr W reached 65.  He had been a self-employed plumber for all of his life and she worked in a school, was not contemplating retirement but needed advice on her local Government pension plans arrangement.

Mr W had not paid much attention to his numerous pension plans and arrangements as he had been happy with his job, and his lifestyle and his wife looked after the finances. However they thought it time to have a financial health check as Mr W had started to feel the effects of too many days under baths and sinks and his knees were not as they used to be.

The first stage was an initial no-cost meeting

As always with us, there was an initial no cost meeting to discuss the way forward, after which  Mr & Mrs W agreed to pay a fee for PML Financial Services to provide an initial report regarding the extent of their existing pension plans and ISAs. Mr W had 5 different policies with 3 different Insurers, one of which he was still paying in to. The couple had some residential properties which they let out as an investment so at least pre-retirement they had spare cash to augment Mr W’s retirement pot.

Mrs W was happy with the level of her pension. She had been paying regular additional voluntary contributions (AVCs) and wasn’t intending to retire when her husband reached 65, although she was in receipt of a State Pension. We checked the projected figures for her.

We then worked out a plan which suited their attitude to risk

Mr W’s active pension policy also provided substantial life cover and a waiver of contribution benefit, which would only be paid out for 6 months after injury or accident at work. The cost of these was a high proportion of the monthly contribution that Mr J was making to this plan. The couple only had a small mortgage left and it was agreed that the contribution to these 2 benefits would be best diverted to the investment element of the pension plan.

This together with monies that they could afford meant that the contribution increased by £300 per month into Mr W’s pension policy, with tax relief this amounted to £375 per month. It was agreed his other pension plans be kept as they were as they were invested in With Profits, which suited his cautious attitude to risk and would mature with possible terminal bonuses at age 65.

Their existing ISAs remained with the provider but the funds were changed for Mr W as he had a high proportion in European equities, not consistent with his attitude to risk.  New ISAs were set up for the tax year but on a monthly basis to help with their budgeting and also to lower the risk of buying at a market high.

The end result at retirement was positive

The couple returned to PMLFS a couple of months before Mr W’s 65th birthday as both wanted to retire.  Mrs W retired at the end of the school year and Mr W, with the assistance of PMLFS, bought an annuity with funds from all his pension plans, thereby getting a much higher annual figure by PMLFS shopping around.  PMLFS received remuneration from the annuity provider.

At PML Financial Services we aim to deliver excellence in financial services. If you would like to see if we can do for you what we did for Mr and Mrs Williams, please contact us for an initial, no commitment, chat.

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