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Trentham Invest
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Case Studies

Taking Retirement Plans Back in Hand

Client comments

When we set out on this journey, I felt as if my retirement plans were in the hands of others. There were a number of uncertainties around the companies' pension plan and the benefits were reducing. The DB scheme was closed and was under severe funding pressure.

We now have a clear direction and plan.

The options were clearly set out and I was able to make informed choices.

The enhanced lifetime allowance protection that has been secured as part of the review process is also a valuable benefit.


John left the ABC Pension Scheme in 1998. He also had a number of other schemes that he had accrued over the years.

Now, a 57 year old director working in the railways sector and married with four children, John wanted to know what he should do about his pension as he neared the scheme normal retirement date, 65. He wanted to pay off his £200,000 mortgage. His net income is £6,428 per month.

John also wanted to have an income of £50,000 per annum after tax in retirement and afford a holiday each year. Achieving these goals would make him feel elated, safe, relieved, satisfied, excited and happy.

He didn't know where to start other than take the early retirement options. He was also aware of lifetime allowance limits but he had no idea what strategy to adopt to ensure he maximised his resources.

Whilst access to the tax free lump sum of £10,600 looked attractive though early retirement, John would be forced to start drawing his pension of £1,597 per annum even if he carried on working.

He didn't need the income; but he did want the tax free lump sum. In the event of his death in retirement his wife Catherine would receive 60% of his pension payments. Upon her death the children would receive nothing from the pension.

What we did

John needed infallible direction, not just choices. Through broad thinking and meticulous analysis of financial data, Trentham Invest were able to show John and Catherine the consequences of each choice and confidently recommend the best course of action.

The key to their new plan was for John to transfer out of this pension and amalgamate this with is other arrangements into one pot. By moving them altogether, his newly acquired pot became £1,162,414.

Measurable results

  • If John left ABC Pension Scheme where it was the projected pension at 65 was £3,800 per annum
  • If he died his wife Catherine would get £2280 per annum
  • If Catherine died their children would get nothing
  • If the scheme went into further financial hardship his pension could turn into £2,673 or less
  • Taking early retirement benefits would give John £2,267 per annum or £10,649 and a reduced pension of £1,597 per annum
  • By taking the transfer value on offer, John could get access to £17,892 capital sum now versus £10,649. That is 68% more tax free cash.
  • By transferring the benefits, Catherine would get the pot of £71,571.
  • If she died the children will get the pot passed on to them.
  • By amalgamating the pensions John can have access to £290,500 to pay off his mortgage now, take no further income and carry on working.
  • In the event of his death, Catherine will get the unspent pot of £871,000. In the event of her death, the children will get the unspent pot.
  • By applying for lifetime allowance protection, John has saved £137,500 in lifetime allowance tax charges.
  • With no mortgage, John will be able to save £31,320 per annum. This could be used to purchase their holidays.

Note: The events and figures quoted in this case study are from a real Trentham Invest client; however, the names have been changed to protect client confidentiality.

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