What would you do with an extra £100,000 in your pension plans that you didn’t know you had? That is exactly the sort of problem that David, a new client at Reeves, found himself WITH when he came in for a Pension Review with us.
David was referred to us by a long term client AND was approaching 55 believing he had well under £100,000 to look after him in retirement. Imagine his surprise when he found out what he actually had in his pension pots – to say he was overcome is putting it mildly.
His goal was to see if he had enough money if he took his 25% tax free entitlement to clear the remaining debt on his mortgage. David believed he had one ReAssure pension worth approximately £30,000 & a Final Salary Scheme, which would give him an income of £3,000 a year.
However, once we received the information on these plans from the providers, our client actually had 3 ReAssure pensions worth £77,000 & a Final Salary Scheme with a transfer value of £147,000!
So what does this mean for David?
David can now clear his mortgage debt of approximately £16,000 which in addition gets rid of his largest monthly expense. This still leaves him with £40,000 of tax free cash in the bank. The rest of his money, which comes to £168,000 has been placed into a Drawdown account, which he can take when & if he requires any further income.
David has actually decided to take £1,000 a month from his drawdown account, which gives him plenty of money for his essentials as well anything else he wants to spend his money on, as well as the surplus £40,000 in the bank if he wants to spend more than this.
Furthermore using our pension calculator when David starts to receive his state pension at 67 (12 years’ time) it shows he will still have approximately £60,000 left in pensions that he can use to top his income up if he needs it.
This leaves David with one final thing to think about! Does he retire in full now or does he continue to work as he enjoys the social element? Certainly a scenario he had not considered when he approached us to look at his pensions!
What service will David now receive?
David has become a Portfolio Management Client & therefore receives regular reviews to ensure his pension is being protected from investment risk, as well as ensuring he takes any further income in the most tax efficient manner.
Does this case study sound like you? Do you know what your pensions are worth?
“A Standard Life report from last year actually found that 63% of the people researched did not know the value of their pension pots!”
Reviewing your pensions regularly is vital! Why not do that with Reeves – The Pension Specialists, just email firstname.lastname@example.org or call us on 0191 281 9862