Client stories: David & Catherine
Not long after we moved house, I made the decision to close down my business and retire in full. With my earnings no longer coming in, we then needed some additional income to help us maintain our standard of living. Following a meeting with Simon, he helped us identify how much we needed to supplement our State Pensions and allow us to cover our living costs.
A financial plan that changes as your life does.
Protecting our family
David: We first met Simon around 12 years ago when I was seeking advice to arrange some life insurance. I owned and ran my own recruitment business at the time and as Simon has a background working with both individuals and businesses, he was able to see that it would be more cost-effective and tax-efficient to set the life insurance up as a relevant life policy via my company rather than setting it up directly myself.
Preparing for retirement
David: After setting up the life insurance I needed, Simon took the opportunity to review both mine and Catherine’s existing pensions. It soon became apparent that these were not set up in the best way to meet our needs. Simon quickly identified that my pension was set up in an overly complex and expensive arrangement and despite the cost, had provided very mediocre growth. He was able to recommend a simpler solution which was easier for me to understand, had lower charges and significantly better performance. These were 3 very big ticks in the box for me!
Catherine: My pension arrangements also needed some work. I had money spread across a couple of different plans which I’d wanted to consolidate for some time, but having taken a closer look, Simon noticed that 50% of one of my pension funds had been sitting in cash, barely growing at all for 3 years at a time when investment markets had delivered strong returns. It transpired that this was an error from when our former adviser had first set up this plan and should have been spotted by him long ago.
Simon was able to consolidate my pensions into a single policy as I’d wanted. As he did for David, he was able to search the market for a plan with lower costs and better performance. Simon also then assisted me to submit a complaint regarding the error made when the plan was set up following which I was compensated for the growth I lost out on during the time my money had been sitting in cash. This was a great outcome for us both and really helped grow our trust that Simon was looking after our best interests.
David: With our pensions set up as we wanted, we agreed to undertake an annual review with Simon each year to review our arrangements, check they were performing as expected and were on track to support us when we came to retire.
Funding the move to our forever home
David: As we neared retirement, we decided to move out of London to the Home Counties. We found an ideal property in a beautiful, picturesque village in Kent but as we were moving to a sought after location, the proceeds from our sale were not sufficient to buy our dream home and cover all of the other costs associated with moving.
Catherine: Simon helped us calculate what the move would cost and what our shortfall was. As our pensions had done so well over the previous years, he identified that the 25% of tax-free cash which had built up in them was sufficient to make the move affordable. Simon was able to arrange for us to withdraw those funds from our pensions which ultimately made the move a reality.
Later life lending
Catherine: In order to be able to afford to move to our new house, we chose to purchase a home which required a fair amount of modernisation. There were also some additional touches we wanted to add to make it a truly special place to live.
Having used most of our savings and the tax-free cash from our pensions to fund the purchase, we needed to find an alternative way to raise the money needed to make these improvements.
David: Thankfully, Simon is also able to advise on equity release, and this seemed a really great option for us. We don’t have any children of our own and so do not feel a need to leave a financial legacy after we’ve gone. Since we were looking to improve the property, no doubt increasing its value, it made sense for us to access some of the equity within the property to cover the cost of doing this.
Catherine: Simon searched the market and recommended a lifetime mortgage which provided us with sufficient funds to cover the initial work we wanted to undertake. He also had the foresight to suggest we arrange a further drawdown facility that we could access in the future if and when additional funds were required to complete further works without the need to go through the whole process of arranging a further loan.
Entering retirement
David: Not long after we moved house, I made the decision to close down my business and retire in full. With my earnings no longer coming in, we then needed some additional income to help us maintain our standard of living. Following a meeting with Simon, he helped us identify how much we needed to supplement our State Pensions and allow us to cover our living costs.
Catherine: We realised that our income needs may well change throughout retirement, and there may also be occasions when a lump sum might be needed for one off expenditure, such as a new car or a special holiday, which our regular income might not be able to cover. It was obvious that flexibility was the key and Simon was able to create a plan that involved drawing down an income directly from our pension funds.
David: To do this, Simon initially undertook a detailed cashflow model to check that the level of income we needed was realistic and affordable based on what our pensions were worth.
We also review this annually to check if we need to adjust the income withdrawn so that it continues to meet our needs and check if our withdrawals remain sustainable based on how the pension has performed so we continue to have the confidence that our pensions won’t run out before we do!
Catherine: In addition to having done all of these things for us, Simon has also taken the time to ensure our own understanding of our finances and investing in general has greatly improved over the last decade. This has given us greater confidence to make decisions about how to use our savings and investments to meet our needs and we no longer panic at every negative news headline.
We also know if we are concerned at any point, we can just pick up the phone to hear a friendly voice from someone we know and trust, and who knows and understands our finances probably better than we do and can give us the reassurance we need.
