Nigel was a senior director for a successful business. However, he had suffered a serious heart attack which had made him re-assess his future. He was aware that his health wasn’t great and wanted to retire as soon as possible to spend time with Harriet and his two children.
Harriet was financially dependent on Nigel; her retirement income rested heavily on Nigel’s two Final Salary schemes. Nigel’s big worries were to not only ensure he could retire, but also that Harriet would be financially okay after he was gone.
In fact, we were one of three advisers he interviewed. He remarked that he liked how we listened, didn’t just agree with everything he said and how we explained our way of working. When Harriet was out of the room, he confessed that he wanted an adviser who could ‘hold Harriet’s hand’ after he was gone. He was very aware that he made all financial decisions and wanted to ensure that she had both the support network to make the right decisions, as well the financial means to fund her retirement.
After gathering all the information around their assets, liabilities, incomes and expenses, we were able to model their financial future. It became clear that their financial future was secure, but Harriet’s wasn’t if Nigel died before her. On the basis his health was bad, and hers was good, this was a major risk.
It was at this time that Nigel’s two Final Salary schemes offered him large transfer values. We analysed their offerings and modelled a number of ‘what if’ scenarios to stress test their financial situation. We established that if we transferred the two schemes into a pension in Nigel’s name and targeted a modest investment return, we could secure their future both whilst Nigel was alive and after he was gone.
We completed the two transfers and assisted in releasing enough tax-free cash to fund the purchase of a holiday home near the coast. Nigel retired and enjoyed the lower stress of retirement. Unfortunately, less than a year after first meeting, Nigel was diagnosed with an aggressive form of cancer and passed away suddenly.
We moved Nigel’s pension fund into Harriet’s name and ensured that all income payments were tax-free. We also updated Harriet on the financial plan and investment strategy that had been agreed with Nigel, to ensure she was happy with the path ahead. It was important that Harriet understood the reason behind the strategy.
Harriet has slowly adapted to life without Nigel. We have continued to work with Harriet and her eldest child to manage her income needs and meet the investment return required. We have done this slowly and gently, as Harriet is still adapting to being in charge of the finances.
We schedule regular meetings with Harriet to provide updates and ensure her planning remains on track to meet her goals as they evolve in future years.