Paul aged 57 who attempted to access his paid-up private pensions pots flexibly without seeking advice was referred to me by his accountant. After an initial telephone call followed by a thorough financial review, I highlighted to Paul that had he proceeded to access his pension pots in the manner he had intended, would have resulted in a substantial and unnecessary tax bill.
Ascertaining Paul’s short-, medium- and long-term financial objectives together with understanding his current financial position now meant that there was a more appropriate and tax efficient solution to consider. As it has been some time since Paul had sought financial advice, it was important to establish how he felt about risk, and on what part of the risk scale he felt more comfortable with. Understanding the level of assets he had behind him and measuring his level of investment experience meant we could have an open discussion around his capacity to withstand any financial loss. Whilst saving on a substantial tax bill was to Paul’s advantage, the steps that we took above outlined that there were several factors to consider.
After conducting a full analysis of his current pension pots, considering all options available lead to a solution that meant that Paul could access 25% of his pension tax free, leaving the remaining funds which formed part of his longer-term objective aiming to benefit from further capital growth.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.
The advice provided to Paul was given after a full evaluation of their specific needs, circumstances and requirements. The solutions provided would not be suitable for most investors and the information provided does not constitute advice.
Mental Health Awareness Week 10th-16th May 2021