Essential Steps to a Sustainable Retirement Income


Are you one of the 400,000 people in the UK whom will turn aged 60 this year?

If so, you’ll soon have to make some of the most important financial decisions in your life.

The UK regulator the FCA estimates that the over 55 year old’s hold £667 billion in un-crystallised pension assets. That’s pensions no one has touched yet – and a fair few quid!

Prompted by letters from insurers or former employers, there will be much digging around in their ‘financial box’ full of various pension statements and policies collected over the years.

Working for one company for 40 years is now the exception and not the norm. We have come across clients with 5 or more entirely different pension arrangements. Each pension has its own unique features.

To add to the confusion, there is now a vast range of retirement income choices and options. Not that everyone retires on a particular day – we are seeing more flexible working patterns.

Two Possible Outcomes

In retirement, there only ever two financial outcomes – your money will outlive you or you will outlive your money. You don’t want to get this one wrong!

New flexible pension options were introduced by former Chancellor George Osborne in April 2015.

However, only a minority of pension providers have included all of the new rules and options within their historic pension plans – including many in your ‘financial box’.

This is because it could prove too costly, technically difficult or risky for insurers and former employers to incorporate all of the options.

This might mean you need to move one or more of your pensions to a new pension provider who does facilitate the flexibility now on offer e.g. flexi-access drawdown, drip-fee drawdown, dependant’s drawdown etc.

Great care is required as many older pension plans may contain valuable guarantees. That might be a guaranteed income (annuity), bonus rate or higher than the anticipated 25% tax-free cash (‘PCLS’).

Some pensions still allow you to take benefits at 50 when the minimum age is usually 55.

If you prefer a guaranteed income (annuity) it is unlikely your current pension provider will provide the highest income for you – always shop around first. We can show you how.

Tailor Made

What is the best retirement income solution for you will come down to various factors including health, marital status, age, your other assets and whether you want a safety-first retirement approach – or are content with a probability-based retirement income strategy. Is 99% certainty enough?

There is a creeping ‘group think’ amongst some ultra-cautious financial planners (and compliance consultants) that unless your essential or core living expenses (more than just beans and toast) are covered by secure (near-guaranteed) income, then you are automatically ruled-out from following any other retirement income strategy.

I don’t necessarily agree with this as a probability approach can work and has worked. Much will come down to your attitude to risk, capacity for loss (a loss and temporary market downturn rarely being one and the same thing), other assets (if any) as well as your investment experience.

We use some great technology to test income sustainability and strategies throughout all historic market conditions. If there was a less than 90% chance of a strategy working – then we won’t recommend it. Not all independent financial (or restricted) advisers use our approach.

Whilst we can’t control the outcome – we can give our clients the best chance of retirement income success.

With the help of investment and retirement research consultancy, FinalytiQ, we’ve made available to you an educational FREE GUIDE entitled ‘Will I Run out of Money’.

This is essential reading for those approaching or already in retirement:

To Download your free copy. Please click here.

Clear Vision

The important thing though is to have a clear explanation and vision of what is available to you for each of your pension plans.

The devil is in the detail. Getting it wrong could cost you and your family dearly.

When you’re saving up for retirement, ‘risk’ is almost arbitrary as you are still earning however, when your earned income reduces or stops, then risks can be more easily quantified as they are much more real.

I have over 30 years’ experience in helping to manage client’s lifetime income needs and fluctuating capital – including throughout two of the largest temporary downturns in the markets we’ve witnessed – the ‘ Tech Wreck’ 09/2000 to 01/2003 and the ‘Credit Crunch’ 11/2007 to 02/2009.

Take Action Now!

If you have any of these pension arrangements below, when was the last time you had these independently reviewed by an expert?

  • Defined benefit (final salary) schemes
  • Personal pensions
  • Group personal pensions
  • Stakeholder pensions
  • Section 32 buyout bonds (also called transfer plans
  • Retirement annuities
  • Defined contribution (occupational money purchase pensions)
  • Auto-enrolment pensions
  • AVCs and FSAVCs. 

Please consider taking advice from us if you are unsure. Pension and HMRC tax rules can change though, and their benefits depend on your circumstances. You can’t normally access money in a pension until age 55 (57 from 2028).

Please contact us for a no-obligation initial consultation on 0131226 2012 or you can email us at

Thank you for reading.