Seaside cottages

Focusing on retirement

Stage four


Life events

  • Paul and Susan plan to retire in less than 12 months and will require an income of £6,000 a month net.
  • They are planning to retire and downsize from their house now worth £1.5 million house to a house worth £900,000. They have an outstanding mortgage of £102,000.
  • They inherited £360,000 from Susan’s parents.

Assets now/at retirement

  • Combined ISAs of £425,000.
  • Taxable portfolio of £235,000.
  • Susan’s Self Invested Personal Pensions (SIPPs) of £1.35 million.
  • Paul’s Teachers pension for 20 years’ service.
  • 2 x £30,000 NS&I Premium Bonds.
  • £65,000 cash on deposit.


  • Continuing to fund for their retirement.
  • Evaluating income options and simplifying their financial affairs.
  • Considering tax efficiency in retirement and how best to arrange their investments.
  • Repaying any outstanding debt.
  • Starting to consider estate planning.

How did we support Paul and Susan’s retirement planning?

Paul and Susan have, by now, accumulated substantial assets via a combination of saving, investing and inheritances. They are now considering how they could best use their hard earned wealth to support them in retirement and any actions they should be taking now in advance of their retirement.

Meeting their income needs in retirement

Having followed the financial planning advice Crowe Financial Planning provided during their annual review meetings, they are now looking forward to a time where they will no longer be working and wish to evaluate how they can meet their income needs in retirement.

With less than 12 months to go until their target retirement date, they ask their Crowe Financial Planning Consultant for formal advice around a formal strategy to meet their net income target in the most tax efficient manner. This includes how they will withdraw from their various pension and investment assets in order to meet their £6,000 per month net income target. Susan is keen to ensure that she does not pay higher rates of tax in retirement. Their consultant produces a formal report and recommendations, including cashflow projections to show the impact of their withdrawals on their capital base over time and to ensure that it is achievable.

Pension considerations

There are also a number of pre-retirement planning considerations. Paul may be able to purchase additional years under his Teacher’s Pension entitlement and/or consider personal pension contributions. They may also need to replace any benefits that drop away in retirement, such as private medical cover or life assurance.

Paul’s Teacher’s Pension will provide them with a secure and inflation-linked base retirement income. Their taxable investment portfolios and ISAs can now be drawn against for a regular income. If required, they can utilise their annual Capital Gains Tax (CGT) allowances to give them an additional tax-efficient source of money.

Minimising tax liabilities

If they choose to downsize their home and release capital, the net proceeds can also be added to their investments, which will boost the income available. They may also be advised to consider other tax advantaged investment vehicles, such as an offshore bond, from which regular withdrawals can be taken to support their income needs in retirement.

Given the current Inheritance Tax (IHT) efficiencies of Susan’s pension, she is advised to only draw down on this fund as required, likely on a 'phased' basis using a combination of tax-free cash and income each year to meet their needs and to reduce her income tax. This requirement would be considered each year at the annual review and planning meetings.

Considering estate planning

They will also need to start thinking about their wider estate position. This would involve an assessment of the current position and discussions around how concerned they are by the potential inheritance tax liability. There will likely be a number of strategies to consider – making further capital gifts to the children, trust-based planning and inheritance tax efficient investing. However, as these discussions will evolve over the years, one immediate solution is to take out a simple life assurance policy to meet the potential IHT bill.

What did this mean for the Wells family?

With sensible planning, Paul and Susan will reach retirement confident that their retirement income needs can be met in a tax efficient and sustainable manner without putting too much strain on their capital. Their hard work over the years has paid off and, by seeking regular advice over the years, their affairs are structured to provide them with financial peace of mind and a high degree of flexibility.

Financial support throughout your life

Find out what each stage for Paul and Susan Wells brings ...

Related insights

Investors should revisit their income and expenditure requirements and, if applicable, reduce their withdrawals until life returns to normal.
We explain the actions you need to take now to account in preparation for the new pensions retirement age increase to 57 in 2028.
Investors should revisit their income and expenditure requirements and, if applicable, reduce their withdrawals until life returns to normal.
We explain the actions you need to take now to account in preparation for the new pensions retirement age increase to 57 in 2028.

Crowe Financial Planning UK Limited is authorised and regulated by the Financial Conduct Authority (‘FCA’) to provide independent financial advice.

The information set out above is for information purposes only and does not constitute advice to undertake a particular transaction. Appropriate professional advice should be taken on specific issues before any course of action is pursued.  Any advice provided by a Crowe Consultant will follow only after consideration of all aspects of our internal advice guidance.

Past performance is not a guide to future performance, nor a reliable indicator of future results or performance. The value of investments, and the income or capital entitlement which may derive from them, if any, may go down as well as up and is not guaranteed; therefore investors may not get back the amount originally invested.

The Financial Conduct Authority does not regulate estate planning or tax advice. 

Our Financial Planning team

Our Financial Planning team, are independent financial advisors that, provides whole of market solutions advising high net worth individuals and families on their UK financial interests.

Our approach is to develop long-standing relationships with our clients built on trust and understanding. We invest significant time in understanding your financial affairs, your future objectives and aspirations.

Phil Smithyes
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Miles Clarke
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Richard Dean
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Aron Gunningham
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020 7842 7325