When life throws surprises into your path, it pays to have someone help you find your way.

That’s what happened to one couple who were longstanding clients of McCrea Financial Services.  Working with chartered financial planner Jonathan Campbell, they had established pension and investment plans for their later years, with the wife having already retired and the husband planning the last few years of his career. Jonathan had helped the clients manage their multiple pensions, moving one into a more flexible plan while retaining another which offered a guaranteed minimum income, providing valuable security in retirement.

The couple turned to McCreas for further guidance when the husband was unexpectedly offered a redundancy package ahead of his planned retirement date.

Jonathan reviewed the couple’s options for how this redundancy payment might be used if it were accepted, and how each of these options would impact on their retirement income. Based on his understanding of the couple’s risk appetite regarding their financial affairs, he was also able to advise against transferring the existing company pension if redundancy were accepted, as this would conflict with their desire for a guaranteed monthly income.

Having fully considered all their options, the couple decided to accept the redundancy, and met again with Jonathan to ensure they had sufficient guaranteed monthly income in retirement as well as access to tax efficient funds for additional purchases. New financial goals were agreed, including investing part of their cash reserves for medium to long term growth and making full use of available tax reliefs, particularly through the use of a large pension contribution to significantly reduce the tax liability on the redundancy payment.   

At this time Jonathan also reviewed the income and tax levels for both spouses, one of whom had been paying higher tax rate prior to the redundancy. After establishing the couple’s required monthly income and confirming receipt of the redundancy settlement, he reviewed their bank accounts and pensions and recommended a suitable amount to be released for investment. The clients agreed to this amount, with the remainder to be used to fund their lifestyle in the short term before they become eligible for their State Pensions.

Having established that the couple would both be basic rate taxpayers in retirement, Jonathan identified tax efficient saving and investment strategies. These included paying an additional single premium into a new pension to take advantage of unused contribution allowances Jonathan had identified from previous years; the opening of new Investment ISAs making full use of each partner’s annual ISA allowance; and the opening of a new investment account suited to their cautious investment profile. These strategies allowed the couple to enjoy flexible access to their funds and growth free from Capital Gains Tax. 

Based on his close working relationship with the couple, Jonathan was also able to offer valuable recommendations on their need to set up wills and Power of Attorney.

All the changes to the couple’s original retirement plans are now paying off, with both husband and wife now happily retired and enjoying their financial freedom.

“Being able to see in advance the likely impact on their retirement plans made my clients much more comfortable in deciding to accept the redundancy,” says Jonathan. “They have been able to fund a prosperous retirement earlier than they had expected, without having to compromise on their lifestyle or frequent visits to family in Australia. It’s always worth talking with a specialist to review any changes to your circumstances – you may have more options than you realise!”    

If you'd like to discuss your retirement plans, you can contact us here or call our offices on 0141 570 1340 and we can arrange a free-of-charge initial appointment.

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