Client Situation

£230,000
  • Divorced
  • Aged 62
  • Outgoing of £800 per month
  • No loans or mortgage
  • 2 Buy to Let Properties (£13,000 pa income)
  • No dependents but 2 children

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A client approached me with a defined benefit scheme from a previous employer. He was being offer £8,240 income per year at 65 and wanted to know if there was anything else he could do with his scheme.

I requested a Cash Equivalent Transfer Value (CETV) on behalf of the client and 3 weeks later received a transfer value of £230,000.

The clients main concern with his existing defined benefit plan was its inflexibility and not being able to pass on to his estate on death.

He didn’t need the additional income as his current buy to let properties and future state pension would cover his modest outgoings.

He didn’t need the spouses benefit with him being divorced and with no partner. This also meant that in the event of his death, no other member of his family could benefit from the pension. He felt that £230,000 was a large amount of money to lose and therefore wanted a way to preserve this within his estate.

He wanted to have access to capital, as his savings were minimal, to spend when he needed.

Over several meetings he expressed his desire to leave the security of the defined benefit scheme for the reasons listed above. I carried out a full analysis of his situation and future expenditure plans.

After highlighting the benefits he would lose, and the unlikely ability to recreate these benefit if he transferred, we decided to move his scheme to an income drawdown plan.

This provides access to capital and the flexibility he needed whilst keeping the assets within his estate for the benefit of his children.

The process took around 5 weeks to complete from obtaining the clients scheme details.

CategoryCase Study
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