Top three financial considerations for retirement

Top three financial considerations for retirementMorna Beattie, specialist dental financial adviser, shares three key things to think about when it comes to planning ahead for the retirement you really want.

When it comes to finally retiring and having the life you’ve dreamed about after all those years of working so hard, the best advice is to plan, plan, plan.

Financial planning early can make the transition from work to retirement as smooth as possible, avoiding any nasty surprises, like big tax bills, and ensuring you’re not unnecessarily losing out through inefficiencies.

Below are three key financial considerations to help you get all your ducks in a row for retirement…

You could retire earlier than you think

A lot of people tend to have a preconceived idea about what retirement looks like. Particularly around the age they can actually retire at.

At Wesleyan Financial Services, we help people understand that they can potentially retire earlier than they may have expected.

To understand what your retirement age could be, you need to really get a good handle on what your current position is.

Key to that is accessing your latest NHS pension statement. This is otherwise known as the Total Reward Statement, as this is the cornerstone of your retirement planning. This statement tells you what you have built up already which allows us to accurately project forwards.

The other piece of paperwork you will need is your Annual Allowance Statement. This can be requested directly from the Scottish Public Pensions Agency. It is normally sent out around October and tells you how much scope there is to add more into your pensions, if appropriate.

Making sure you have all this information, along with details about any other private pensions you may have, is key to planning ahead accurately. This helps you to understand when you could retire and what that could look like.

Structure your finances for maximum tax efficiency

You may be pleasantly surprised at how much you could do in retirement by structuring your finances for maximum tax efficiency.

As specialist financial advisers we do this through cash flow modelling. By analysing your income, existing assets, and expenditure, we can build a model that helps you to visualise what your current financial position is. It also informs you on adjustments that could be made to make sure you’re not paying any unnecessary taxes.

This modelling shows you, in a really clear way, where you have excess income. And also where there could be potential shortfalls for what you want to achieve in retirement.

It also takes into account forecasts for interest rates and inflation, so you can make sensible assumptions for your plans. It’s important with models like these to continually monitor and review them as your finances change throughout your career.

With a cash flow model, you can make well-informed decisions. This ensures your retirement savings fund is working as efficiently as possible.

It may make more sense to use other assets ahead of your pension

Pensions are obviously a big part of funding your retired life. However, in some circumstances it may be better to put them to the back of the queue. Use other assets first, for example, to avoid potential inheritance tax problems. In the past few years, we’ve seen people experiencing this as pensions are often ring-fenced from inheritance tax now.

It’s also important to remember that, with the exception of the tax-free cash you receive, you pay tax on your pensions when you take money out of them.

So, it may be that when you’re looking ahead to your retirement and legacy planning, it may be more efficient to use other financial assets ahead of your personal pension.

Please bear in mind that advice in relation to inheritance tax planning is not regulated by the Financial Conduct Authority. Tax treatment depends on the individual circumstances and may be subject to change in future.

If you’d like help with your financial planning or are looking ahead to retirement, you can book a no-obligation financial review with us by visiting www.wesleyan.co.uk/dental or calling 0800 316 3784.


Advice is provided by Wesleyan Financial Services Ltd.

‘WESLEYAN’ is a trading name of the Wesleyan Group of companies.

Wesleyan Financial Services Ltd (Registered in England and Wales No. 1651212) is authorised and regulated by the Financial Conduct Authority and is wholly owned by Wesleyan Assurance Society. Wesleyan Assurance Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Incorporated in England and Wales by Private Act of Parliament (No. ZC145). Registered Office: Colmore Circus, Birmingham B4 6AR. Telephone: 0345 351 2352. Fax: 0121 200 2971. Calls may be recorded to help us provide, monitor, and improve our services to you.

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