Independent Pension & Investment Advice
Home visits throughout Lanarkshire, Glasgow & Central Scotland.

CASE STUDIES

Below are a few examples where we are able to help clients with their retirement and investment goals. We don't generally have a minimum or maximum investment amount and generally try to help all clients where we can.

CASE STUDY 1 – Retirement options - Flexi Access Drawdown
For many clients flexibility is a key consideration when choosing which retirement product best fits their needs.
Flexi access drawdown products continue to evolve and this is great news for clients.
In this example we illustrate product innovation. We were able to, not only drawdown a taxable income, but also make use of the available tax free cash to support the client’s income goals:
Client A has a pension pot of £180,000 and requires a medium term income of £500pm. His fund allows him to take 25% tax free cash immediately however he has substantial personal savings elsewhere and no need for further cash.
We instead drawdown the tax free cash as income to partially satisfy his income goals by drawing down £400pm tax free. A further £125pm taxable income is drawn (£100pm after basic rate tax).
He has achieved his medium term income goals of £500pm with only £25pm of income tax.


CASE STUDY 2 – Pension planning for business owners
More and more business owners are looking at tax efficient ways of extracting capital from their business. With the introduction of the ‘dividend tax’ business owners should give consideration to additional pension contributions including the use of ‘carry forward’ which allows them to ‘mop up’ unused pension allowances for the previous 3 years. Here is a recent example to illustrate this:

Tax year

Annual allowance

Contributions made

Unused allowance

2013/14

£50,000

£7261

£42,739

2014/15

£40,000

£16,000

£24,000

2015/16

£44,500

£18,000

£26,500

2016/17

£40,000

£18,000

£22,000

 

 

Total available allowance

£115,239

In this scenario the director was able to make an employer pension contribution of up to £115,239 thereby reducing the company’s tax bill significantly and enhancing the director’s pension. If the same sum was to be taken as a dividend, the tax implications would be substantial.

 

CASE STUDY 3 – Defined Benefit Transfer  
We have seen a rise in clients looking to transfer from Defined Benefit pensions (commonly known as Final Salary) to help them achieve various goals. For some clients, their goal is to improve the available tax free cash. For others, flexibility and death benefits are extremely important. We would always emphasize that transferring these type of schemes are not generally advisable as you are giving up a valuable guaranteed pension. Just because you can doesn’t mean you should!
However for the right clients under the right circumstances, transferring to drawdown can allow clients to achieve their individual goals.
In this example the client needed a large lump sum to clear some debts and also provide death benefits for their grown up children:
Client B has a pension pot of £300,000 and requires the maximum tax free cash. The current scheme only offered tax free cash of £21,000 which wasn’t sufficient for their needs. By transferring to drawdown they were able to access 25% of the transfer value. (£75,000) Additionally in event of death the remaining pot could pass to the children on death whereas the scheme had no provision in place for the grown up children.

 

To find out how we can help or arrange a home visit please contact David on 01698 815 006 or REQUEST A CALL BACK HERE

 

 

 

Financial advice Glasgow ~ Financial advice Lanarkshire ~ Scotland Financial advisor

 

Chartered Financial AdviserDM Pension & Investment Solutions Ltd is authorised and regulated
by the Financial Conduct Authority under reference 758771.