Background

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Peter 52 and Jane 54 have two children, aged 22 and 24. Both children are married with their own children and are currently renting where they live. Peter has a good job with a decent salary and he is a member of his employers defined contribution pension scheme and he also has money in a previous employer’s final salary scheme. Jane is a nurse and is contributing to her NHS final salary scheme. They currently have a small mortgage on their house along with some modest savings and investments

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Key Client Considerations

 

They needed help to work out what age they were likely to retire at and the level of income they may need to support their planned lifestyle in retirement. It was important to them to work out whether they would be able to help their children getting on to the property ladder and even make some provision to help their grandchildren go to university. They also wanted to continue their passion for holidays abroad as long into retirement as they could. They were both unsure whether their current pension savings and other savings would be enough.

 

Approach

 

We met with Peter and Jane and built a thorough understanding of their current expenditure and to consider how much income they would want once they are both retired. We confirmed that the mortgage would be paid off before retirement. We used a retirement modeller to show them a number of different scenarios of how they could adapt their savings just now and the impact this had on their income in retirement. We were able to factor in providing additional sums of money to give their children help towards deposits for their homes and some help with university fees for their grandchildren. We were also able to show them how making additional pension payments may help give them more choice around the age they may retire at. This was all helped by explaining the new options available to them under “Freedom and Choice in Pensions” introduced in April 2015.

 

Outcomes

 

Both Peter and Jane are now much more confident they will be able to retire safe in the knowledge that their retirement income will last at least as long as they do, even taking account of inflation. We agreed to meet with Peter and Jane annually to check their progress and to ensure that their plan remains on track. We will also review and update the retirement modeller giving them confidence that they are doing the right thing and peace of mind that their money will last.