Case Studies

Working together to find the solution that is right for you

Case study – Mr A

Mr A, age 56, took early retirement from a bank in December 2016 and wanted to look at his options in terms of transferring out of the Final Salary Defined Benefits Scheme.

Mrs A was particularly risk adverse and was initially very uncomfortable with the thought of moving away from the scheme where a pension income of £20,000 could be taken when required.

Mr & Mrs A visited us and learnt that the DB scheme allowed funds to be transferred to Mrs A upon the death of Mr A which would provide income at  50%, and small amount for children up to 23 in further education. Under a pension transfer Mrs A would receive 100% of the fund and the fund could then be passed on to the 3 children outside of Inheritance Tax.

The Cash Equivalent Transfer Value was determined to be some £200,000 higher than had been envisaged.

Mr & Mrs A had wanted to be able to help their 3 children to get on the property ladder at some point in the future and felt that this would need to be as a result of downsizing in respect of their residential property. In transferring the pension, Mr A has been able to take out 25% tax free cash from the enhanced fund value and now has the ability to assist the children with house deposits when required. Mrs A’s initial concerns about transferring out have been overcome and they now feel in control of the pension funds which are managed under a "Bespoke" arrangement.

Mr A has new employment and does not need to drawdown from the pension.

Case study – Mrs B

Mrs B has worked for a bank for 25 years but is considering her options where there have been a number of colleagues recently made redundant which has been unsettling.

She decided to cease contributions to the Final Salary Defined Benefit Scheme and a Cash Equivalent Transfer Value of £420,000 had been obtained. Discussions had been held with an IFA who was looking to charge a 3% initial fee.

Mrs B, age 49, is divorced with 3 children and wished to explore the alternatives to the Final Salary Scheme.

Being a single parent Mrs B was keen to ensure that she was able to provide for her children both in the immediate future and beyond. The death benefits with the Final Salary Scheme meant that in the event of her death the children would receive a modest pension whilst in full time education and effectively the funds would die with her. The ability to be able to transfer the funds in their entirety to the children outside of Inheritance Tax was a key factor in the decision making.

At PDC we were able to provide Mrs B with comfort in terms of how we would manage the funds which gave her confidence. We were also able to save her £10,000 compared to the initial fee as per the original adviser. Funds have been invested under our “Select” range.

Case study – Mr C

Mr C, aged 57, had previously worked for one of the “Big 4” banks and had a deferred Final Salary Defined Benefit Scheme. He was keen to explore the alternatives but was unsure who to approach and trust with what was his main asset having discovered in excess of transfer value of £850,000.

There was a strong desire to take control of these pension funds where in recent years his wife’s parents had both passed away along with their substantial pension funds held within Final Salary Schemes.

MR C was introduced to us by a colleague of his who had in fact recently transferred his Bank Pension.

Mr C was impressed with the quality of the information available on the Pension Drawdown for Bankers website and with the advice that we were able to provide. The funds have now been transferred and being managed under the “Select” range. Tax free cash has been obtained as it is his intention to acquire a holiday home. The pension funds are now available outside of his estate to provide improved death benefits for his wife and children.

Case study – Mrs D

Mrs D is aged 54 and previously worked for a bank for 12 years. Her Final Salary Pension has been deferred since leaving in 1991 and she has been advised by the Scheme that her pension at age 60 will be under £5,000 p.a.

Mr D also worked for the bank and is in the process of transferring his fund with a value of £775,000 and they were both of the view that the pension of Mrs D was too small to be of interest.

A Cash Equivalent Transfer Value was requested and Mrs D was pleasantly surprised to learn that this amounted to over £215,000. Mrs D is delighted to be taking control of her pension funds. She is 55 next year and plans to take 25% tax free cash in order to help their son with a deposit on purchasing his first property.

If you would like to find out more or review your own position please contact us by email or call us on 0800 03 04 008

Past performance is no guide to the future. This information is for illustration purposes only and should not be construed as a specific recommendation or advice. Investment returns will fluctuate and are not guaranteed.