A new client was referred to us when one day suddenly he had been given the bombshell that he was going to have to retire almost straight away. He was 65 but had not planned to stop work until he was 67. As a partner of a professional services firm he thought he could control when he stopped, but it turned out this was his business partner’s decision to make, and he had no real choice. He came to us worried that he had not accumulated enough funds to be able to retire now, but now knowing whether he would be able to find more work.

At our Exploration Meeting, we established that he had a nice home, and a second property, plus a pension worth around £300,000, plus some savings. He was adamant in his mind that he could not afford to retire, and that he needed to get up to £500,000 before he could do so. His wife wanted a new kitchen, they didn’t want to downsize as they loved their home and one of their children lived abroad, so they wanted to be able to travel regularly in retirement. Their dream retirement now looked completely unachievable.

They also wanted to leave money behind to their children, and they could see no way of that happening either. As the main bread winner of the family, this was clearly causing him a lot of stress; he felt like he had let his family down by not saving more. So he needed our help to establish whether he could afford to retire, what his retirement income would look like, and if not, how we could go about fixing it.

We agreed we would review all of the pensions and savings he had and then build him a Lifetime Cash-Flow Forecast as part of an Efficient Financial Plan. This would give him the clarity he would need to see where he was today, and how bad retiring now would look. It would give him an overview of the rest of his life from a financial perspective.

What we found was that his existing pensions and investments were invested in poor performing funds, and also didn’t offer him the flexibility to retire in the way that he needed. Because there were several of them, there was no cohesive investment strategy, and had he stayed with them, he would have had to buy a fixed income that wouldn’t have been sufficient for him to retire on. What we also found was that if we consolidated his pensions and investments into a proper diversified portfolio, on a platform where we could better manage and control his income in line with his desired lifestyle, he could in fact afford to retire now. Not only that, he could afford to create the retirement he wanted, his wife could have the kitchen, and there would likely be plenty left over to leave to the children.

So what we built for him was a strategy that best utilised the rental income and made the best use of his pensions and savings by moving them into an environment where the investment risk was controlled, where they could increase and decrease their income as their lifestyle required, and where they could pay drastically less tax.

What this meant to him was that he didn’t need to look for more work. More importantly, he could start his newfound freedom. An opportunity to create his Life 2.0! As it happens, that was his next concern; what would he do with his time….. so that is where The Dream Retirement stepped in, but that is another story.

Bill came to us as he was nearing State Pension age but was still unsure what income he was likely to have once he retired and whether this would be enough, or if he would still need to work as a part time driver.

Bill had a number of pensions from previous employers, including one with a valuable guaranteed annuity rate, as well as some cash deposits and a few other investments he’d picked up over the course of his working life.

We reviewed all the plans that he held, consolidating some of the pensions and utilising the guaranteed 10% annuity rate, which along with the State Pension and some rental income now forms the bulk of Bill’s essential income. We also drew up a Lifetime Cash-Flow Forecast, to demonstrate that his income should remain sufficient until he turns 100, and on top of this, he has other investments which he can draw from to pay for the fun things he plans to do through his retirement, or if he has to pay for care home fees in the future.

Investing money can sometimes feel like a scary prospect, especially if this is a new concept. But what if you are a seasoned investor? Are you confident that you are getting the best possible returns, most suitable level of risk, or highest level of service?

One of our clients, Graeme, came to us mainly out of curiosity. Graeme was already using the services of another IFA and had achieved 10% growth on his pension investment over the last 3 years. Even to us, this sounded fairly good, and Graeme was understandably happy and comfortable with his returns and the investment performance.

However, we wanted to investigate Graeme’s investment further. Continually reviewing your investments, or finances in general, is pivotal to your future success. Just because you have achieved something one year, doesn’t mean that you will continue to see positive results. But it’s more than that; after all, how can you be confident that you are getting the best returns possible if you don’t continue to regularly review your options.

With this in mind, Graeme asked us to research how his investment could have performed if he’d placed it elsewhere.

At Efficient Portfolio, we often use the services of an expert Discretionary Investment Manager. These qualified professionals will continually monitor our clients’ money to make sure that they maintain suitable growth and that the portfolios don’t become overly risky over time.

Our team compared Graeme’s existing pension investment with a comparable portfolio through our DIM and the results were surprising. We found that, if Graeme had invested with our DIM, he would have seen 25% growth on his investment, rather than the 10% he had received in the same timeframe.

Graeme decided to move his investment over to us, as he felt that the additional growth he could receive would help him to achieve his financial goals much quicker and enable him to do far more in his retirement than he could have hoped.

Defined Benefit, or Final Salary Schemes, have been hitting the headlines recently. Historically, these have been seen as the ‘Rolls-Royce’ of the pension world, as they pay out a guaranteed income for life. Some of the other benefits that they offer are incredibly valuable, so, in years gone by, Financial Advisers would pretty much universally recommend that you keep hold of these schemes.

However, in recent years, company’s have realised how much these schemes cost them to maintain. Paying a former employee a large sum of money each year is possibly not great for business, so companies have, in some cases, been offering very large sums in exchange for the former employee to give up their Final Salary benefits.

One of our clients, Ray, had discovered that the company he had once worked for was offering former employees who had a Final Salary Scheme a lump sum payment to give up their benefits. Ray didn’t really know what he could stand to be offered, or if this was the best route for him to take, which was causing him some confusion and uncertainty. He had a good idea of what he wanted to achieve in retirement but didn’t want to throw this into jeopardy by accepting a transfer value that may not be sufficient.

Transferring a pension requires expert analysis and should not be done without professional guidance, so Ray chose to approach Efficient Portfolio, as we are a Chartered firm with years of experience and specialist qualifications. This gave him confidence and peace of mind that his pension would be properly and thoroughly assessed, and that his needs and goals were at the forefront of the decision.

Working together we looked at exactly what was important to Ray and assessed what benefits he could stand to gain if he remained in his Final Salary Pension. We also looked at the transfer value and the benefits of his existing scheme and compared these to what he could stand to gain from a Personal Pension. Through careful research, ‘stress testing’ and the plotting of various scenarios, we were able to provide Ray with his options, so that he could make a fully informed decision.

Once Ray had achieved this clarity, he was able to confidently decide upon the best way forward with his retirement funds. He now feels far more in control over his future and really values the ongoing reviews, new flexibility and ongoing support and guidance. He also knows that he can retire happily and not worry about running out of money.

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.

I was sat in my Rutland office, which until recently was a converted barn on a farm. We looked out of the meeting room window to see rolling fields, with Red Kites swooping in the sky, and hares playing on the ground. On this September morning I was with a long-standing client of mine, called David, a flat cap, welly wearing farmer that is shorter than I am…. Yes that is possible thank you!

“Charlie, the time has come for me to retire, and thanks to the help that you have given me over the years, particularly with the lifetime cashflow forecasting you have done, I am now comfortable that I do have enough money to live off for the rest of my life. The problem is, that isn’t what worries me the most. What worries is, what am I going to do with my time when I stop farming. Am I going to be bored hanging around the home all of the time? And how am I going to stay fit? Am I going to have to start going to the gym for spinning classes clad in lycra? “

“David”, I said, I understand your concerns, because I have heard them many times before. They are also not far from the battles of my own that I work through in recent years. I do however have some news for you. This morning a huge box arrived at our office, which is from my publisher, because within that were the first copies of my book, ‘The Dream Retirement: How to Secure Your Money and Retire Happy’, and I’d like you to have the first copy. Whilst the first half is about the money, you’ll know a lot about that, as that’s what we’ve been doing for you for many years, I’d like you to pay closer attention to the second half, because this is about how you spend your time and improve your wellbeing; and I’d like you to have the first copy.”
Now David was a very special client to me, not just because he’d been a client since right back in the Biggsy days, but also because he’s my Dad. So, my Dad got the first copy of my book, just as he was retiring.

The Dream Retirement led to a bit of a roller-coaster of success for us as a firm. I started being featured on national radio, in the national newspapers, and being asked to share the stage with some internationally renowned speakers. Efficient Portfolio is now known as one of the top financial planning practices in the UK. You don’t need to take my word for it, that’s what The Sunday Telegraph and our top industry magazine New Model Adviser have both said. We have grown new business by 50% in each of 5 of the 6 years, and we are a Chartered firm, which puts us in the top 14% of practices in the UK.

But there is nothing special about me, what is special is that we help our clients at a much deeper level than we have ever been able to before.