Case Study: Retirement Planning

Married couple both age 65 retiring now, two financially independent children and five grandchildren. Both client and partner in reasonable health although Mr had high blood pressure and angina. Looking to generate appropriate level of retirement income. 


  • To Provide £10,000 pa of retirement income as tax efficiently as possible
  • Clients were confused and worried at their lack of understanding of the options open to them regarding the generation of retirement income. They were however clear on the planned lifestyle including regular holidays and what income level was needed.
  • Clients did not expect to need all of their investments in their lifetime and wanted to preserve as much as possible for their children but were not ready to make outright gifts yet.

What we did:

  • Provided clear explanations of the retirement income options.
  • Agreed and set up income producing retirement plan which produced £11,000 of retirement income, exceeding their requirements. Took account of client’s cautious attitude to investment risk to discount other income alternatives which may have delivered the required income level but which would have caused anxiety if the underlying values fell in any given year
  • Discussed and considered various IHT solutions, including use of appropriate trusts, always keeping in mind the “capital preservation” objective. This immediately saved the client £40,000 in IHT


  • Income stream established of £11,000 pa which met their lifestyle needs which exceeded their expectations, allowing them to do more in retirement and to save a little on the side to help preserve capital for the kids.
  • Ensured that immediate IHT saving of £40,000 was made which kept clients in control of capital and able to receive a regular income from it. At the same time assets within the plan would fall outside their estate over the next few years (some after 2 years and some after 7 years) generating further tax savings of £20,000 and £40,000.