How advice at retirement can help you create a long-term plan


Retirement represents a huge change in your life. It’s a milestone that often means making decisions that could affect the rest of your life. However, research indicates that thousands of retirees are accessing pensions and embarking on the next stage of their life without seeking financial advice. It could mean finances are stretched further than expected in retirement.

According to research from the Association of British Insurers (ABI), a third of retirees are accessing pension savings without ever taking advice. As the average pension rises to £120,000 it’s becoming increasingly important that careful consideration is made before it’s accessed. Encouragingly, the number of people retiring with more than £250,000 in their pension has doubled in the last two years, now accounting for 11% of pensions. However, it’s crucial to have a financial plan that reflects retirement aspirations to make the most of hard-earned savings.

Not seeking advice when approaching retirement is part of a wider trend; the Financial Conduct Authority found 91% of UK adults did not receive any financial advice in 12 months.

Why is an effective plan important for retirement?

Retirement might be a milestone all of us are hoping to tick off, but it’s rarely straight forward when it comes to planning. There are numerous factors to consider, some of which are outside of your control. Among the reasons why planning for retirement is important are:

Longevity: Life expectancy is on the rise and you’ll likely be spending longer in retirement than previous generations. As a result, it’s necessary to plan how your pension and other assets will last for 30 or even 40 years. If you were to live past the average age, how would your finances provide for you?

Pension Freedoms: Since 2015, retirees have had more freedom in the way they access their pension. One of the key decisions here is whether you’ll opt for a guaranteed income for life by purchasing an Annuity or choose to withdraw from a pension flexibly. Using Flexi-Access Drawdown mean you need to ensure you take a sustainable level of income, or risk running out in later years.

Using assets: Having the assets to fund the retirement you want is just part of the story. When and in what order should you make withdrawals? There’s a range of factors that should come into play here, such as growth potential of different assets and tax liability, as well as the lifestyle you want.

Unexpected costs: When building a retirement plan, it’s important to consider the unexpected. Having a financial buffer can help you maintain lifestyles and keep working towards aspirations even when obstacles come up. One of the biggest unexpected costs some retirees are finding challenging is when care is needed. It’s a bill that could add up to tens of thousands of pounds a year.

Investment volatility: Pension Freedoms mean more retirees are leaving a portion of their pension invested whilst they access it, and you may have other assets invested too. This is an approach that can help stretch savings further and deliver an income for longer. However, careful consideration needs to be given to investment volatility, including your risk profile and what steps should be taken if values fall.

How advice at retirement can help you

Retirement means making some potentially life-changing decisions, and for some people, wanting to be in complete control of that process is appealing. However, seeking financial advice can give you confidence, clarity and, hopefully, lead to the retirement lifestyle you’ve been looking forward to.

Financial advice can help at the point of retirement in numerous ways, from understanding all the assets that could provide an income now and in the future through to taking proactive steps to safeguard against the unexpected. With the benefit of cashflow modelling, you can also visualise how different retirement decisions are likely to have an impact in the short, medium and long term too.

  • Would taking out a chunk of money from your pension to renovate your house now leave you short in 20 years’ time?
  • Can you afford to provide financial support to children or grandchildren if they’re struggling to get on the property ladder?
  • How would needing long-term care impact your finances and the inheritance you leave behind?
  • Would giving up work sooner affect the lifestyle you hope to lead?

Financial planning can help you answer these questions and more. If you’re approaching retirement and want to create a plan that reflects both your aspiration and financial provisions, please get in touch. Our goal is to help you understand how your pensions and other assets can deliver a retirement you can look forward to.

Please note: A pension is a long-term investment not normally accessible until you are 55 years. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.