Jenny – Orthodontist with NHS
“Nicola said two words that caused me a great deal of concern, panic and anxiety: ‘transfer out’. To me this meant losing a life line, being cast off in a boat in rough waves and not having enough money to live on for the rest of my life.
But then Nicola showed me how transferring out wouldn’t affect the amount I received from my pension each month. I would also leave a sizable legacy for my husband and family which I had no idea I could do.
I felt that for the first time I really knew what I should do when I retired from the NHS.
Nicola even took the time to meet with my accountant Linda, and explained what she was proposing just so Linda had the chance to tell me what she thought of the advice Trentham Invest had given me. I’m pleased to say Linda thought it was excellent advice and she and Nicola were totally on the same page”.
57 year old Jenny is a partner in a successful practice. As well as having a private pension Jenny also had a significant NHS pension. Initially her primary objective was to understand her pension options including when she would be able to retire and what would be the effects on her pension of early retirement. However, research into her financial position quickly uncovered a potential tax issue, that, if not handled correctly, would generate a large tax charge; c. £165,000.
Jenny also wanted flexibility to access her wealth in retirement. She is very involved with her community and was thinking that she might get involved in a few projects that could require funding.
A fixed pension with a monthly payment would make this difficult. Ideally she wanted to be able to access her wealth when she needed it.
What we did
Common belief is that the public sector pensions have their options and theirs alone. But there are bigger and wider choices available and people, Jenny and her accountant, simply don’t know this.
While Jenny is an expert orthodontist she admits she is not as confident when it comes to dealing with her finances and wanted an expert in this area to help her. We eliminated her fears through clearly explaining her options, not just from the NHS, but those available to her in her life. We then explained the consequences of each choice. We used simple diagrams where words and numbers on such complex subjects and matters are just too complex. This gave Jenny the eye opening experience of ‘another world’.
- Jenny was able to take almost double the cash of £320,000 compared to £175,000 for her community work. She would also be able to take further cash lump sums in the future if needed.
- If Jenny took early retirement from the NHS scheme, in the event of her death her husband Nathan would have received £23,595 per annum. By transferring out this figure would be between £39,433 pa and £52,578 pa. Or, £577,080 if he took a cash lump sum.
- Saved up to £165,000 in unnecessary tax charges by keeping the HMRC out of her pockets.
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.