Retirement is changing, and as our healthy life expectancy increases, many of us are looking forward to an active, prosperous retirement that feels very different to those experienced by our parents and grandparents.  

“My clients were a couple in their early fifties” says Financial Adviser Graeme Melrose, “and they wanted to explore their options for early retirement. We conducted a comprehensive financial review to help them assess the viability of retiring on their chosen date.”

Around eighteen months before the couple hoped to retire, they took advantage of the free no-obligation consultation McCrea offer to all clients. They told Graeme that they had questions on the implications of accessing their pensions before retirement age. They outlined their plans to sell their main home and move to their holiday home by the sea, which they intended to significantly upgrade, and explained that they wanted an assessment of the feasibility of their plans to finance these moves and a comfortable early retirement. After hearing about the comprehensive retirement planning service offered by McCrea, the couple knew this would suit their needs exactly and became clients.

“We started off by helping the clients gather all the information we needed to give a comprehensive assessment of their finances,” explains Graeme. “In addition to compiling information on funds in a range of current accounts, savings accounts and ISAs, we contacted pension providers for up to date statements and crucial detail on early access conditions. We  investigated early repayment charges for the mortgage on the holiday home and confirmed the end date for the fixed interest rate.

We also conducted an analysis of our clients’ attitude to risk and found that they had a low appetite for risk and preferred to examine ways to use existing assets to fund their early retirement plans.”

Our review identified £70,500 in current accounts, savings accounts and ISAs with the couple adding an average of £2,000 to their savings each month. The clients had no outstanding mortgage on their main home, which was valued at around £280,000. They had an outstanding balance of over £69,000 on their holiday home and were making the maximum permitted overpayments each month to reduce this balance.  The work they planned to carry out to this property was expected to cost £100,000 - £150,000. The couple held a total of five pensions between them, including both final salary and defined contribution schemes, and requested our advice on the most advantageous way to access these funds.

“Our clients had their sights firmly set on early retirement,” explains Graeme, so we made sure all our recommendations supported this goal. Given their desire to initiate building works on their second home before selling their main property, and recognising their aversion to financial risk, we advised against investing at this point, to ensure funds were available in easily accessible accounts for the renovations.“

We established that the mortgage on the holiday property had an early repayment charge of £3,185 if settled before the end of the fixed rate period just under one year into their planned retirement, and so recommended that they continue with the mortgage until that date to avoid a large repayment fee.

This mortgage was protected by a Decreasing Term Assurance Policy, and we advised our clients to place this policy into a Trust to ensure quicker and easier payouts to the beneficiaries in the event of any successful claim.

Our examination of the couple’s pensions portfolio allowed us to make personalised and detailed recommendations to our clients. We helped make sure the couple could protect each other by naming the other as a beneficiary on policies where this had been overlooked. We also recommended that one partner switch one of their pensions to a cash fund to better suit their risk averse preferences and ensure the funds would be protected for encashment in the very near future.

Based on our recommendations to the couple on how to achieve their early retirement plans, we provided them with a comprehensive cashflow forecast showing their liquid, pension and property assets until the age of 80. This included exact instructions for which pensions to access and when, providing a clear plan and reassurance that they were achieving the maximum benefit from their assets. The couple could see how changes such as their house sale and renovation plans were accommodated in the financial plan, as well as a detailed forecast of their State Pension entitlement.

Other than authorising one fund switch within the same pension plan, this couple didn’t have to take any action, set up any payments or make any new investments. What they wanted from working with us was peace of mind, and ultimately, we were able to provide our clients with that priceless reassurance that their dreams of early retirement were well within reach.

Keen to enjoy this new phase of their lives, and with no need to provide for any dependents, the couple are now considering extracting more value from their pensions earlier in their retirement, and we’re assisting them with detailed projections showing the possibilities open to them.

"They are now counting down the final few months before retirement and looking forward to a new life by the sea. That’s all because they had a clear idea of their goals in life and came to us for a financial plan to help them make those dreams a reality.”

Speaking of the service provided to them, the clients said ''We thought we'd have to work full-time for a few years yet but the reports Graeme compiled for us and the options he outlined in detail enabled us to make the decision of retiring next year which is fantastic. We'll be able to enjoy an early retirement knowing that we have enough funds to comfortably live on and understand the options we have for accessing our pension funds at different stages depending on changing circumstances.''

''The tailored service provided by Graeme was excellent and he made, what seemed to us, a complex situation of several different pension funds, easy to understand.  We would recommend McCrea's retirement planning service to anyone.''

McCrea Financial Services is Authorised and Regulated by the Financial Conduct Authority. The value of investments and the income derived from them may go down as well as up.