It’s difficult even to know what you want out of retirement in this situation. Often we find talking through with you, before anything else, what you want out of retirement actually helps define the strategy needed to help shape your plans and make them achievable. The result..? A certain peace of mind that simply wasn’t attainable before you go through the process – something we are very happy to do with you.
The problem
When Peter, 52 and Helen, 51 first started talking to Miller Knight in 2000, they had a multiplicity of mixed pension schemes, investment plans and cash deposit funds that they had picked up throughout their working lives. They were unclear as to what they all amounted to. Peter had two small businesses and Helen held a senior position at a local University.
Neither Peter nor Helen had any clear idea on how and when they could realise the monetary value of all their accumulated schemes, nor whether they were tax efficient and getting a good return on them – they suspected not and naturally were anxious to get a firm handle on what it all was going to give them.
The solution
Before disentangling the answers to these questions, Miller Knight sat down with Peter and Helen to try and find out what they wanted from retirement in relation to what they potentially had and when – for example, when Peter reached the age of 60 which was eight years away. Peter and Helen wanted to increase their holiday time as they approached retirement age to four–five weeks a year, from the standard two–three, and to be able to indulge more regularly their passion for ‘fine wine and dining’ throughout the year, especially during the summer ‘season’, taking in classic events such as Cheltenham and Goodwood.
Miller Knight advised on what assets they had and what they would provide, creating an action plan with recommendations on what they would need to do (in relation to their assets) in order to achieve their retirement objectives. With Peter retired and Helen deciding to continue working having been offered a very good position at the University, the couple’s objectives were achieved by – amongst other measures – ensuring minimum tax was payable on Helen’s salary by placing significant amounts each month towards Additional Voluntary Contributions (AVCs) within her defined benefits scheme, saving them tens of thousands of pounds in tax over the years. Miller Knight also saved Peter and Helen a potential £240,000 liability in Inheritance Tax, through use of trusts around their pensions and investments. With their pensions, an amount was targeted to be attained by Peter’s 60th birthday, which has been successful – even though their objectives had changed due to Helen deciding to continue working.
A sensible investment strategy was defined and put in place to meet their goals, which has been maintained every year through regular quarterly reviews / investment updates and a face-to-face annual meeting. Miller Knight recommended their life assurance was increased initially, to cover what either partner might need in the event of the other’s death, and continue to use their ISA allowances and tax-efficient investments to ensure no money was lost unnecessarily through tax.
The outcome
Since 2001, their investments have doubled and the capital return on pensions has been 75% after income withdrawals.
Peter is now fully retired and enjoying having all his time to himself with the means to spend as much time as he wants with his daughter and grandson, together with going to all the season events and ‘European escapes’ they enjoy as a couple. Helen has reduced her working week down to three days to continue doing the job she loves, which also pays very well. Both partners are satisfied and content with the peace of mind a well organised phased retirement is bringing them.