AS YOU MOVE THROUGH THE FINANCIAL JOURNEY OF YOUR LIFE THERE ARE 3 KEY STAGES.
If you are still wealth building you’ll need to position your funds for growth.
Just pre-retirement you’ll want to look tax-efficient ways of preparing for your transition into retirement.
And if in-retirement, management of cashflow and long-term stability of your funds will be your focus.
There’s also 3 Key Principles for Peace of Mind in Retirement and THE BIG QUESTION you must ask any advisor. Firstly, let’s consider some of the main factors depending on which stage you are in life . . .
1. BUILDING WEALTH FOR THE FUTURE – MANY YEARS LEFT UNTIL RETIREMENT
If you are still working and building up your pension and savings there’s some important questions:
– Are you receiving the maximum tax incentive possible from the Government
– There are additional payments available into your pension to add to your contributions.
– Are you using tax efficient savings such as ISAs properly?
– Are your pension funds being actively managed to your risk profile and aspirations?
2. JUST PRE-RETIREMENT – WHEN IS IT POSSIBLE, WILL YOU HAVE ENOUGH MONEY?
Knowing when it’s ok to retire with enough money to live on is one of the biggest decisions you’ll ever make.
To make a safe decision requires careful cashflow planning to project forward income required.
As your income will be diminishing your savings, you’ll also need to know there is growth potential to offset this with your fund. That will depend on the construction of your pension portfolio at this critical time.
3. IN RETIREMENT – MAKING YOUR SAVINGS LAST
You’ve got this far, and your work is done. What money you have has to last your lifetime.
And we don’t want you having to make your way back to work again! So what will give you comfort?
– Getting the portfolio of funds aligned to your risk profile and in a diverse set of funds is the first priority.
– Then a cashflow plan to age 100 with all events and income requirements mapped out.
– Ongoing expert monitoring of fund performance and cashflow planning.
THE BIG QUESTION YOU MUST ASK ANY FINANCIAL ADVISOR...
As you search around to find the right advisor, please ask them all the same question.
“How will you manage my money in retirement?”
It will reveal how hard they are going to work to preserve what you’ve worked hard for.
It will also show how ambitious they are to continue to grow your funds as you draw from them.
Yes, it is still commonplace amongst advisors to transfer vast proportions of a retiree’s pension pot into cash.
Even though we have been in very low inflation times over recent years, so have we also seen close to zero returns in cash deposit accounts.
The gap between the two means the erosion of your spending power.
A steady drip drip of your money declining in value.
For example, in the 3rd quarter of 2020 the general measure of inflation The Retail Price Index (RPI) was 1.1%.
The best cash deposit rate for a portfolio of £500,000 was 0.5%.
Meaning in one year your pension would lose £3,000 of spending power before you’ve had any income from it.
Magnify this each year for the next 20-30 years and your cashflow is not going to look too healthy.
THE 3 KEY PRINCIPLES FOR PEACE OF MIND IN RETIREMENT
This is where we help you to identify your income needs and ‘big ticket’ items you will be needing during your retirement. We plan the cashflow to your 100th birthday and update it at each one of your 6 monthly reviews.
This is how we divide or diversify your pension fund into different investment types which is known as Asset Allocation. Assets include equities, income funds, fixed interest, corporate bonds and Gilts.
Through a series of questions using the Finametrica risk profile assessment we find out how you think about money. You will complete the assessment at the outset and every 2 years to ensure your thinking has not changed.
In summary, your pension fund and your retirement is about you feeling comfortable with the income you are taking and knowing you can fund larger one-off pieces of expenditure along the way.
Understanding your tolerance to risk and knowing your money is never invested in a way which makes you feel uncomfortable.
For some this is having too much potential for values to slip. For others it is having the maximum opportunity for growth, even with higher risk.
If you are an investor with a moderate approach to risk and most are, you are unlikely to want your pension fund gambled on some unregulated overseas property fund which ‘guarantees’ you double digit returns (nor would we).
On the contrary; if all your pension was placed into cash-based assets, as a moderate risk investor, you’d be pretty miffed to see your money eaten away over the coming decades by inflation. Inflation is the enemy of savings.
You can do something about this now.
By investing your pension in a risk-adjusted, diversified portfolio you will not only counter inflationary effects, but also give the opportunity for growth to offset the income you draw from it.
PENSIONS FREEDOMS AND YOUR RETIREMENT
There has been nothing short of a revolution since the Pensions Freedoms introduced in April 2015 by the Government.
From age 55 you have never had a better opportunity to build a financial future which you have full control of.
The 3 main benefits of a personal pension or SIPP are:
- You can draw upon a personal pension from age 55, with a tax-free allowance of 25% of the total; and the rest taxed at your marginal tax rate.
- There is no need to buy an annuity upon retirement
– as long as your pension fund is invested within a suitable income drawdown wrapper. From age 55 you have freedom to take your pension as you wish.
- The ability to pass your fund on to anyone you nominate, upon death.
YOUR INCOME OPTIONS UPON RETIREMENT
– Leaving the pension pot untouched
– Cashing in the whole pot in one go (subject to tax at your marginal rate)
– Purchasing an annuity
– Getting an adjustable income – Flexi Access Drawdown
– Taking cash in chunks – Uncrystallised Funds Pension Lump Sum (UFPLUS)
It is the last two of these options which really gives you the freedom from age 55 to take income as you wish.
For example, you may need to use part of the tax-free cash to pay off mortgages and loans. Or you may need sums along the way for special events. The choice is yours.
Flexi Access Drawdown is taking potential taxable income only.
UFPLUS give you ultimate flexibility, taking a combination of tax-free cash and potential taxable income.
LIFE 2.0 RETIREMENT PLANNING & THE LONG VIEW
Retirement isn’t what it used to be.
For a start, the standard retirement age of 65 has gone right out the window.
On the one hand many are having to work longer. On the other, some are selling businesses in middle age and ‘retiring’ early. Welcome to the era of freedom and choice. Unlike 1948.
1948. The year the UK Basic State Pension was introduced with age 65 as the retirement date. A stroke of genius from the Treasury – with an average life expectancy of 68 at the time. Compare then to now.
Average life expectancy in 2020 was 81. The new state pension stands at £179.60 per week.
A mighty long time to fund your lifestyle while sleeping easy at night. Knowing your income can last.
A realistic prospect of 20 – 30 years after work. Possibly more. How will you feel in your eighties if the money’s running out? Nobody wants to think about that. But thinking about it now will stop the worry.
It’s all about planning and monitoring. And having a Plan A so bombproof you won’t need a Plan B.
Incidentally, this is why we plan personal cashflow projections to age 100, way beyond average life expectancy.
WHY IT’S IMPORTANT TO TAKE CONTROL NOW
We all lead such busy lives, it’s easy to keep putting off sorting out your pension.
Retirement can seem so distant even if you’re in your 50s.
Though history shows the best time to plan for the longer term is right now.
Periods of growth follow periods of uncertainty, as we’ve seen over the last year.
A risk adjusted personal pension portfolio is a proven vehicle for a lifetime income.
And peace of mind comes from taking action on your financial journey.
Your next step is just a click away to chat through your requirements.
All the rest is up to us. To invest, manage and review alongside you. Year in year out.
OUR INDEPENDENT FINANCIAL ADVISORS
THINKING OF MOVING FROM YOUR EXISTING ADVISOR?
It’s easy to move on from another advisor.
We’ll handle everything.
All that’s needed is for you to sign some letters of authorisation and we’ll do the rest.
None of your investments will be switched into new funds until you’ve agreed with our recommendations and you’re fully happy with any changes we propose.
7 KEY FEATURES OF THE OAKLANDS WEALTH MANAGEMENT SERVICE
British Standard BS 8577 Awarded Service
12 Month Money Back Service Guarantee
Lifetime Cashflow Planning
Risk Adjusted Personal Investment Portfolio
ISO 222222 Certified Financial Advisors
Monthly Fund Analysis
2 Investment Portfolio Reviews Per Year
A WORD FROM OUR CLIENTS...
“I have been using Oaklands’ services since 2007, following my changed financial circumstances from divorce. Helen’s advice and handling of my investment portfolio has enabled me to become more relaxed about my financial situation and to not worry as much as I did in the early days, when handling finances was new to me.”
A WORD FROM OUR CLIENTS...
“After great dissatisfaction with the service of major high street banking group I approached Oaklands to manage my pension and investment portfolio. They have provided sound advice on pre- retirement planning and achieved a good return on our capital as well now in retirement. The service offered by Helen and the team at Oaklands is second to none.”
A FRIEND FOR YOUR FINANCIAL JOURNEY...
THIS IS NOT A DIY SERVICE – WE TAKE FULL RESPONSIBILITY FOR SETTING UP YOUR PENSIONS AND SAVINGS. FOR LIFE.
No half measures. We don’t set it up then leave you all at sea. We manage your investments ongoing and hold ourselves accountable for steering you through your financial journey.
This phrase came from a client who said that’s exactly what we felt like to him, he said “you are like a friend or good neighbour who’s always got my best interests at heart.”
Whatever the reason you come to us we care. We really care. Like it’s our own money.
Tidying up bit and bobs of pensions and putting them neatly in a pot you have full control over.
Maybe transferring a final salary pension if your objectives are better met with your own pension.
Making sure you get all the tax efficiencies legally available to you to enhance your money.
Pointing the microscope on 3,000+ funds and finding the best ones to secure your retirement.