CASE STUDY

Our client was married and about to retire at age 60. He held a number of personal pension funds totaling £500,000. He had been diagnosed as suffering from the early onset of prostate cancer.

He wanted to know how best to use the fund to supplement other pensions in retirement. He was aware annuity rates were low and did not want to commit the entire fund to annuity purchase. He also did not want to risk the entire pension fund suffering from any stock market down turn.

We helped this client to extract £125,000 tax-free from the total fund. This was then invested in low risk vehicles to supplement income whilst keeping access to the £125,000 as needed. A quarter of the remaining pension fund was used to buy an annuity but not on a standard basis.

We obtained an impaired life annuity that bumped up the annual annuity payment by almost 10%. Given all the forgoing was low risk, the remaining 50% of the pension fund was placed in a pension draw down arrangement. Here a deliberately low income was taken in favour of aiming for growth, within medium to higher risk funds, with an eye to further annuity purchase in 10 years time.