Roger contacted Efficient Portfolio because he had recently retired and wanted to find a way of maximising the returns he took from his Defined Benefit Pension. Roger’s peculiar circumstances meant that he required a sizeable lump sum right away, with which he planned to buy a barge.
However, longer term, he didn’t require a great income, as he lives a fairly low-cost existence exploring the canals of the UK. The pension that he was to collect provided the opposite to what he needed: a small lump sum and fairly high regular income. Furthermore, Roger had children from previous marriages, who he wanted to benefit from his pension, but he was divorced and had no spouse.
We applied to his pension provider for a transfer value, which came back as greater than we had expected, and so we decided to transfer the Defined Benefit Pension to a Personal Pension. This provided him with access to a tax-free lump sum of £200,000 – more than enough to buy a barge.
The balance of the fund is used to provide an income, which should, provided the investments perform as expected, be sufficient to last until he’s at least 100 years old. Anything left in the pension pot will then be inherited by his children.