Retirement Planning

Every retirements look different - it depends on your lifestyle, needs, and objectives. A good retirement plan starts with understanding what income you’ll need and when. This includes:

• Regular income – to cover everyday spending such as bills, food, and leisure.
• Lump sums – for larger one-off costs such as home improvements, a new car, or gifts to family.
• Timing – whether income is needed straightaway, or whether other resources (like savings) can be used first.
• Future needs – planning for healthcare or support costs.

By setting out these goals clearly, we can match your pensions, savings, and investments to the pattern of income you require, giving you clarity on how your retirement will be funded.

When you reach retirement, you can usually take benefits from your pensions in one of three main ways:

• Flexi-access drawdown – your pension remains invested, and you can withdraw income or lump sums as needed. This offers flexibility and the chance for further growth, but income levels depend on investment performance and need careful management to avoid running out of money too soon.
• Uncrystallised Funds Pension Lump Sums (UFPLS) – you take lump sums directly from your pension without moving into drawdown. Each payment is usually 25% tax-free, with the rest taxed as income. This can suit people who want occasional withdrawals rather than a regular income, though timing and tax need to be planned carefully.
• Annuities – you use some or all of your pension pot to buy a guaranteed income for life (or for a fixed term). Annuities remove investment risk and can provide peace of mind, but the income is fixed and usually cannot be changed later.

Each approach has strengths and limitations. Many people choose a blend of options – for example, using drawdown for flexibility while buying an annuity to cover essential spending. We can explain these choices clearly, set out the risks and benefits, and help you decide what mix best fits your retirement goals.

Cashflow modelling is a way of projecting your income, spending, and assets over time. It shows how long your money might last under different assumptions, such as inflation or investment returns. The aim is to give a clear picture of whether your retirement income is sustainable and highlight any adjustments that may be needed.

 The chart below provides an example of how income might be structured over retirement:

• Current Salary (purple) continues up to retirement.
• State Pension (yellow) begins at state pension age and runs for life.
• Annuity (green) adds guaranteed income, if purchased.
• Pension Drawdown (blue) offers flexible withdrawals from pension savings.
• Target Income (black line) represents the desired annual income, adjusted for inflation.

The model demonstrates how different income sources can work together to meet your retirement needs, maintain a steady income, and adapt over time. 

The second chart below shows how a drawdown pension fund might reduce over time as income is taken:

• Each bar represents the remaining value of the pension pot at a given age.
• The pension value increases up to the retirement age.
• Between retirement age and state pension age, the pension value declines at a faster rate as a higher amount is withdrawn to meet the income target.
• From state pension age, the decline steadies to reflect the reduced withdrawals needed to fund retirement.
• All values are shown after inflation, giving a clearer picture of real value.
   

This kind of modelling helps ensure your withdrawal strategy is sustainable and aligned with your long-term goals.

Pensions need to be monitored and managed, both while you are saving and once you start drawing income. Circumstances, tax rules, and investment markets all change over time, so regular reviews are essential.

We provide ongoing support to:

• Track the performance of your pension investments.
• Adjust contribution strategies to make the best use of allowances and tax relief.
• Review income withdrawals to ensure sustainability and tax efficiency.
• Update cashflow modelling as your plans, spending, or market conditions change.
• Keep your overall retirement plan aligned with your long-term goals.

The aim is to give you confidence that your pension remains on track and continues to support your retirement throughout life.