Edward Thomson has worked as an accountant all his life. He is a family man with a wife and 5 adult children. He transferred his personal pensions into a Hornbuckle Mitchell SIPP a number of years ago to gain more control over his fund. Edward likes to keep a tight reign on his money and has held his investments with a discretionary fund manager ever since. The value of his portfolio is currently £450,000.
Edward has reached age 50 in good health and has decided to transfer his SIPP to a Hornbuckle Mitchell FIPP in order to enjoy the fullest range of retirement options.
Within his new FIPP, he moves into Income Drawdown. At this stage he only wants to take enough Tax Free Cash to pay off his mortgage and go on a family holiday to celebrate. As he is still working, he doesn’t need to start taking any regular income.
At age 60, Edward takes semi retirement. He remains in Income Drawdown, choosing to take the rest of his Tax Free Cash and a small income. The majority of his portfolio is left untouched, with small dis-investments made every month to cover his pension payments.
Edward takes full retirement at 65. Although he starts to receive a state pension, he reviews his overall needs with his Financial Adviser and decides to also increase the income from his FIPP so that he and his wife can do some travelling together.
After 10 fabulous years, he decides to move into ASP in order to keep control of his investments, which have continued to perform well. He doesn’t want to buy an annuity as he is in good health and expects to live many more years. He decides to take the maximum income allowed under ASP and continues to enjoy control over his own funds.
Unfortunately, Edward’s wife passes away when he is 78. Within a few years, Edward needs some help with his day to day needs. He doesn’t want to be a burden on his children and decides to move into a private nursing home. At this point, following a review with his aFinancial Adviser, he moves into Scheme Pension, allowing him to increase his income further to cover the cost of the nursing home.
At age 85, Edward dies leaving only a small amount in the fund. A combined tax charge of 82% is applied and the remainder is passed on to his children.