Covering All Bases
I was approaching my defined pension retirement date and was unsure of which option to take.
I had had a number of health scares over recent years and was concerned how they may affect my longevity. My wife enjoyed her job and was earning a good salary so wanted to continue to work for another couple of years.
We had saved well throughout our lives and had paid off all our mortgage and had no debts. Through saving hard we had accumulated jointly around £400,000 in savings.
My company defined benefit scheme closed a number of years ago and I also had a defined contribution company pension with a value of around £250,000. I asked Simple to undertake a full financial review of my situation.
The whole process was very thorough and through regular telephone meetings I found it very clear and easy to understand. We gained a better understanding of our state pensions; when they would come into payment and how much it would be as it is based on our national insurance contributions.
Simple help me to understand what my actual income needs in retirement would be and demonstrated to me that it was very difficult to see a scenario where I would need the regular income from my defined benefit scheme. Our annual income requirements in retirement in addition to our two state pensions was only £6,000 net.
With my wife continuing to work for a few more years and our joint savings and defined contribution pension scheme, Simple recommended that I transfer away from my defined benefit scheme into a low-cost flexible pension plan.
This pension plan would always be available, however it looked highly unlikely that I would ever need it. This course of action also provided me with the security that I could pass this pension on to my children on my death. However if in the future I ever needed additional capital or income, this fund would still be available. As I had more than sufficient capital and income I also liked the inheritance tax advantages of this approach.