Global Bank

Timothy – Global Bank

Client comments

“I wanted someone to take away the pain from all of my financial stuff and manage it for me. I didn’t want to waste what time I had left at the end of the working day and week doing investments and managing funds.”

“When I received another letter about my company pension, at first I wasn’t going to do anything about it. However, after a short conversation with one of the team at Trentham Invest I found out that they could get me an up to date transfer value. I hadn’t appreciated that could happen. What followed has completely changed my financial position for now, my retirement and for my wife and children.”

Problem

Timothy, a trading floor manager with a global bank, first became a client more than two years ago at age 45 having been recommended by a work colleague. He wanted to get out of the ‘rate race’ by age 55, and save 10 years of his life.  The problem was he didn’t see how this was possible .

  • Timothy wanted to semi-retire at age 55 and set up his own company. To do this he thought he would need about £50,000 pa income in today’s terms.
  • The scheme normal retirement date was at age 65.
  • The scheme was underfunded by 26%.
  • Timothy had a Final Salary Pension from his previous employer and employment.

What we did

At the foundation of every piece of advice we give are the acquisition, analysis and interpretation of data. This case was no different.

  • When Timothy first became our client the cash equivalent transfer value (CETV) of his final salary pension was £674,086. On balance, we decided to leave the benefits where they were and review again later.
  • However, twenty one months later the CETV had risen by 45% to £981,370. We remodelled the projections and compared the outcomes of waiting until age 65 versus receiving financial support at age 55 to live a life dream.
  • Timothy took the £981,370 plus £60,919 from the money purchase plan, giving him a seven figure personal balance sheet.

Measurable results

  • If he took benefits from his final salary scheme, taking benefits at age 55 would have cut his benefits from £64,427 pa to £38,976 pa.
  • The death benefit to his wife would fall from £41,951 pa plus a lump sum of £322,136 to £25,984 pa.
  • However, by exchanging these for an alternative arrangement, he could now look forward to a personal pension of £56,403 pa at age 55 (or £96,474 pa if he retired at age 65).
  • Plus, with a personal pension, the death benefit to his wife would be £1.04M versus £25,984 per annum.
  • On the death of him and his wife, the balance after tax would be inherited by their children – unheard of with a company scheme.  This amount could be circa £460,000.
  • Timothy’s plans to semi-retire at age 55 are now a reality as he is on track for a £56,400 p.a. income from the pension fund.

Note: The events and figures quoted in this case study are from a real Trentham Invest client; however, the names have been changed to protect client confidentiality.