Client Situation

£435,000
  • Married
  • Aged 55
  • Outgoing of £1600 per month
  • No loans or mortgage debt
  • Good Health
  • 3 Children but not dependent

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I received a contact request through this website for a man who had just received his transfer value. He was surprised at the figure and immediately thought he needed to transfer this into his own name so it was ‘safe’.

After speaking to him at length, it became apparent that his main objective was to pass any unused funds onto his wife and children on his death.

This was his only and main pension income and he planned to work for another 10 years. His thought process was that if he died early, his estate would lose the value of the transferable fund. Only his wife would benefit from the 50% spouses pension meaning she would receive half the income he was on, on his death.

His pension was forecast to provide him £17,450 at age 65, and together with his wifes £5,200 NHS pension income, this was more than enough to cover his forecasted £16,000 per annum outgoing. Two years after he retired he would also receive a full state pension, increasing his guaranteed income further.

He didn’t have any investment experience or indeed need any more income or flexibility in retirement, his main concern was just to pass some funds onto his children as he had no savings.

Now, one thing I reiterate to people who have this thought process is that pensions are primarily there to ensure you and/or your spouse/partner have enough income in retirement. Anything that left is a bonus. It shouldn’t be the main driver to pass money on when the pension is an absolute need for you whilst you’re alive.

I brought to his attention that if I could offer a solution where he could keep his guaranteed income, together with providing a cash lump sum to his children on death, would this be preferable.

He hadn’t thought about other possible solutions to passing money on but after a further discussion, I suggested a Whole of Life plan. Whole of life plans are a life cover policy that provides protection for as long as you live, whether this be to 65 or 95.

For a monthly premium which was affordable to him and one that was guaranteed not to increase, he was to meet the objective of passing some funds onto his estate without putting at risk his own retirement lifestyle.

Don’t get me wrong, I have recommended clients transfer away from schemes to pass funds onto their estate in many other instances, but there have been other overriding factors which deemed it to be in their best interest in their personal situation.

The advice you receive is personal to you and will be based on your circumstances and objectives. I always have your best interests at heart and if there is a way I can help you meet your objectives without giving up your pension, i’ll always discuss this with you first.

CategoryCase Study

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