Case Study: Financial Planning

Financial Planning incorporating retirement and investment planning

Client Profile

  • Client: 59-year-old female
  • Circumstances: married with grown-up children
  • Status: in employment
  • Profession: company accountant
  • Client aim: to retire early age 60


Simon first met his client, Sarah, four years ago. Initially, Sarah sought advice about finances and her state pension. This time around, Sarah was approaching retirement age; as a full-time employee of a well-known travel firm, she wanted to feel confident in making decisions about her pension options and to gain a clearer understanding of her tax position.

The challenge: navigate multiple pensions and their impact on lifestyle and tax

Sarah had a large final salary pension from a previous employer, as well as a generous pension pot from her current employer. However, she was concerned about the value of her pensions and her tax position and obligations: would her lifestyle be affordable in retirement? Was the thought of retiring early realistic? She had many questions and sought advice to determine whether her goal was possible.

Action taken by The Lost Coin Financial Planning Ltd

Maintaining a comfortable lifestyle

Alongside Sarah, Simon looked at her income and expenditure to understand the minimum amount that she’d need to live. Holidays and family time were high on Sarah’s list of priorities; Simon factored this in, because maintaining her lifestyle in retirement was important.

After valuing the pensions, Simon presented Sarah with her options and what the tax implications of each would be. Fortunately, Sarah could take her pension from her previous employer straight away. In Sarah’s case, it was best to take a reduced pension and a tax free cash lump sum. Of course, everyone’s circumstances differ and it’s important to take financial advice before making decisions. Simon helped to complete the forms and Sarah was a step closer to her early retirement goal!

Dealing with unusual circumstances

It wasn’t possible to do anything with Sarah’s pension from her current employer until she retired. Yet, Sarah found herself in an unusual situation; she was employed by a company in administrative difficulties. As the situation played out, Sarah was asked to stay on past her retirement to help as the business was wound up. This meant Sarah was eligible for redundancy, instead of solely being a retiree.

As is often the case when businesses flounder, the situation gives rise to many questions and Sarah’s pension was no exception. With her pension being transferred to a new provider, it is effectively in limbo. Once the transfer is complete, Sarah plans to invest some of her redundancy cash as well as her pension according to her values, which is a key motivator for her. And the all-important holidays? Simon’s devising a strategy which enables Sarah to draw income from investments and pensions, to top up what she already has. The result is Sarah can rest easy, knowing that her lifestyle is sustainable.

Impact on the client: reassurance and clarity

Sarah met her goal of retiring early at the age of 60. By going through income and expenditure with Simon, she gained a better understanding of her spending. Most importantly, Sarah gained reassurance about the affordability of her lifestyle.

After considering all the options, Sarah now has a much clearer understanding of her pensions and investments. This puts Sarah in a stronger position; she has the confidence to know that she can invest in line with her values and knows that she has the power to make decisions which will allow her to meet her goals as her life evolves.

Ask about investing in line with your values. If there’s something that’s important to you, or something that you want to avoid, let your financial adviser know.


A word from Simon…

Always take advice before taking action.

Sarah came to me before doing anything, which meant that we were able to explore the options. Professional advice meant Sarah could make an informed decision, as opposed to relying on a gut feeling or an emotional response. Or worse – having to choose from a limited set of options after taking rash action!

Action is the key word here too. Once you have taken advice, put the wheels in motion. Sarah’s story is a great example of this…

Having met with Sarah four years ago, she had taken steps in the meantime. This meant she was in a good position; her state pension was sorted, her finances were in good shape and she had a clear goal to work towards. Advice alone won’t help you achieve a great deal. It’s a starting point to guide you towards your goals; of course, it’s down to you to make decisions and take action to meet them.

Finally, ask about investing in line with your values. If there’s something that’s important to you, or something that you want to avoid, let your financial adviser know. Being direct, open and honest about what matters to you gives them the best opportunity to help you invest in line with your beliefs.

If something in this client story chimed with you, get in touch. You can contact The Lost Coin Financial Planning Ltd for an initial consultation at no cost to yourself.

A pension is a long-term investment. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Your pension income will be affected by a number of factors at the time of taking benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.