Independent Financial Services
We were approached by Ian via an introduction from an existing client. Ian was in his mid to late 50s and had reached a well-paid executive position in a national organisation. Although he enjoyed his work and was proud of his achievements, he wanted to explore restructuring his work-life balance and move into partial retirement.
His reasons were similar to those that many people associate with at his age, regardless of their specific
occupation – lengthy commuting time was frustrating, the constant demands of the corporate environment were taking their toll on his stress levels, the serious illness of a close friend of the same age had given perspective, and above all he yearned for more time to spend following his outdoor pursuits, and having just become grandparents he and his wife wanted to devote time to visiting their family in another part of the country.
Until recently, Ian had always believed that he would have to work through to his mid-60s, but a few of his friends were confident that they could accelerate the process. He knew that he had a substantial ‘final salary’ pension from an employer for whom he worked earlier in his career that would commence at 65, and that his state pension age was 66.
In addition, he had built up a large fund in the Group Personal Pension scheme of his current employer, and was interested in understanding whether what he had read in the weekend papers about ‘pension freedom’ and ‘flexi-access drawdown’ could help him improve his quality of life.
Alongside this, he was aware of a growing trend in his industry for people of his age and level to move to a consultancy basis in order to have control over how much they worked, and Ian was confident that he would be in demand if he went down this route.
All of this context came to light during our first meeting with Ian, which we held at his home on a day that he was not working so that he was relaxed and focused on the issues. The discussions were aided by Ian having given thought to the family budget and exactly how much he felt he and his wife would require to have an enjoyable standard of living once he left full-time retirement.
Later in the meeting, we explained the fundamental differences between drawdown and annuities, and how drawdown carried the flexibilities that would enable Ian to move to a consultancy basis now, by bridging the shortfall in his income requirement until the final salary and state pensions kicked in.
After further discussions about investment risk – both in terms of what Ian was comfortable with and what level of risk was needed to meet his objectives – Ian engaged us to prepare a suitability report.
This recommended a drawdown provider and investment portfolio, and reassuringly included lifetime cashflow planning projections to demonstrate that the financial plan was sustainable for life – ie that the drawdown fund would not run out.
We meet Ian face-to-face twice-yearly to review both recent performance and his needs going forwards. We are also often in touch between these times by phone or email as Ian has online access to his drawdown plan, and as a ‘hands on’ individual is keen to run thoughts by us, which we welcome.
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Backhouse Independent Financial Services Limited is authorised and regulated by the Financial Conduct Authority. FCA Firm Reference Number: 126319. https://register.fca.org.uk For further information on our costs and services, please contact us.
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Business Park Nelson, Lancashire BB9 6RX
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Registered in England.: Company No. 01140032.
