A client of ours, Jeremy, who was a pilot for one of the biggest airlines in the world, had been with Efficient Portfolio for quite some time. With two boys at university, he wanted flexible and easy access to his money, as cash-flow was quite rapid. Owing to this, we only managed his ISAs and General Investments, to make sure he had enough, but equally could access his money as and when he needed it.
But as the boys neared the end of their education, and Jeremy and his wife Jane began to think about their futures, a new opportunity raised its head. Jeremy was given the option to leave his Final Salary Pension Scheme and receive a lump sum of money.
This may sound like wonderful gift, but it was actually tarnished with uncertainty, worry and confusion. Should Jeremy stay in the scheme and receive a guaranteed retirement income for life, or should he jump ship (or aeroplane in this case) and manage that money himself? Final Salary Pensions come with many benefits, but can also have plenty of restrictions. Would staying in the scheme give him everything he needed n the future, or could he actually increase his income by taking the lump sum? The other issue is that this type of scheme is incredibly complicated, and making uniformed decisions can cost you dearly.
Thankfully, we are pension specialists, so he turned to use for help. We helped him weigh up all the options, the tax implications and the risks, so that Jeremy felt far more informed and confident about his choice. Having this clarity meant that Jeremy felt he could leave the scheme, as he had more to gain.
We helped Jeremy navigate his way through the journey of leaving the scheme and guided him on how to maximise this new-found wealth. We built an investment portfolio for him and also helped him identify the most tax efficient ways to drawdown the money, so that him and Jane could look forward to their retirement.
But Jeremy was also concerned about the future of his boys. What would happen if something unexpected happened to him or his wife? Would their children have enough money to lead a comfortable life? Could their inheritance be lost if there was a divorce or death in the family?
To help with this, we helped Jeremy to set up a Trust, so that the money would be further protected from tax and would pass down the bloodline of the family.
Jeremy now feel completely confident about the future security and happiness of his family, so is delighted he chose to leave his pension scheme. But just to make sure that he stays on track, we have continued to review his financial planning to ensure he remains on track.