Mail Order Industry

Michael – Mail Order Industry

Client comments

“I had some incredibly important questions about what I should do with my pension. I really wanted impartial advice; advice that suited me. Having had a bad experience with another IFA in the past it was vital I understood how Trentham Invest would be advising me and that I knew I would be getting value for money.

Clearly Nicola was on top of her game and had a good grasp of my situation. She was able to answer all my questions and I knew she would do a thorough job.”

Problem

54 year old Michael had a deferred pension with a mail order company. He came to Trentham Invest with three questions:

  1. “Should I leave it as a deferred pension?”
  2. “Should I take early retirement?”
  3. “Or should I transfer out?”

As a deferred member, the biggest risk was if the pension scheme got into financial difficulties.

What we did

Having showed Michael the consequences of each choice in a clear and concise way he was left in no doubt about what he should do.

 

Measurable results

This is how we answered Michael’s three questions:

  1. No, leaving it as a deferred pension risked reducing £14,558 per annum to no more than £13,102 pa if it went to the Pension Protection Fund or even less if it was wound up.
  2. No, taking early retirement just to protect the pension was not guaranteed to protect the pension. The viability of his pension would still be linked to the financial viability of his former employer. Plus, taking early retirement would reduce the benefit anyway.
  3. Yes, transferring out would provide a new ‘pension pot’ of £247,704. Upon retirement he will be able to take a tax-free sum of £61,926. In the event of his death his wife would receive the full amount of his pension fund rather than a percentage of his deferred pension. Plus, upon his wife’s death, the fund would provide a legacy to his children.

 

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.