Last week I saw a client who unfortunately suffered a serious sudden illness last year. The outcome at the time was unclear as they were unsure if they would make a full recovery or whether they would be capable enough to go back to work.
They had come to me for advice on their financial position & look at the options available 12 months ago. Throughout this period I have been in regular contact with them as they didn’t want to make a decision due to the uncertainty of their future.
What were their options?
- Carry on working
- Stop work & defer taking their pensions
- Stop work & take early retirement
- Stop work & take early retirement due to ill health
- Take the Transfer Value & use one of the personal retirement options on the open market
Firstly the client entered talks with their organisation to seek options whilst we did investigations on the open market options
What open market options did we investigate?
- Enhanced Life Annuities
- Switching the fund to a Personal Pension to maximise death benefits
- Switch the fund to Drawdown – this would give her a 25% tax free lump & potentially a higher income than the current scheme would give. Additionally in the event of death it would leave money for her husband & family, which was seen as their main priority due to their current health condition
So what happened next?
Unfortunately this is where the problem started. The client as stated above had asked their employee for the facts about their pension plan. Their employer however has taken this request as the instruction that my client wanted to retire & has forced her down a route without explaining the other options she has available.
Therefore the client can’t now look at the open market options that we investigated, which in turn means they maybe missing out on a significantly better option that would meet their desired priorities in a more appropriate manner.
This case study scenario is about someone with ill health but this is the case for anyone wanting to look at their retirement options!
The moral of this case study is that you must tread carefully when looking at your retirement options! Please do seek advice before contacting your employer!
If you would are you thinking of retiring then contact us NOW on 0191 281 9862 or e-mail firstname.lastname@example.org to arrange an FREE initial appointment