Do I need a retirement or pension specialist at retirement?

You’ve probably spent most of your life saving. Decades of pension contributions, investments, and National Insurance contributions all come to fruition when you decide to give up work.

When you retire, you will have potentially hundreds of thousands of pounds in your pension pot. In this era of longevity, that money may have to last you 20, 30 or even 40 years.

And, your options at retirement are complex and often misunderstood. The introduction of Pension Freedoms in 2015 has only magnified this, significantly increasing the range of choices available to you at retirement.

So, as you approach retirement, it makes sense to take advice from a professional to ensure that those savings can help you live the lifestyle you want. Indeed, research by Moneyfacts has found that clients accessing their pension funds through drawdown without advice are three times more likely to run out of money compared to those who sought advice.

The four risks you face in retirement

If you have a Defined Contribution pension (a ‘money purchase’ scheme) you face four main risks when it comes to your retirement.

  1. ‘Sequence risk’ and running out of money

Research shows that the investment return you receive in the first ten years of retirement largely determines whether you’re likely to run out of money over a typical 30-year period.

If you get good returns in the early part of retirement, you’re unlikely to run out of money. If you get poor or even mediocre returns in the early part of retirement, you may have a problem.

One of the main ways to manage sequence risk is to ensure you stick to a sustainable rate of withdrawals from your fund. A common approach is the ‘4% rule’ – where restricting your withdrawals to 4% of the value of your fund in any year should be enough to sustain the fund for a 30-year period. However, as specialists we feel this is a rule of thumb and many should take less and many should take more.

  1. Underestimating the effects of inflation

If your retirement is going to last 20, 30 or even 40 years, a major challenge is how to maintain the buying power of your money in real terms.

A yearly income of £1,000 in 1988 had the buying power of £476 by the end of 2018 – a reduction of over 50% over a 30-year period (using the Consumer Price Index).

  1. Living too long for your money

While many of us may fear death, for retirees the greatest fear should be of living too long! Indeed, studies regularly suggest that ‘running out of money’ is a major concern for many people in retirement.

Retirement income planning is particularly challenging because we’re planning for a finite, but precisely unknown retirement period. Without the proverbial crystal ball, it’s tricky to estimate how long we’re likely to live.

  1. Paying too much tax

Paying taxes doesn’t stop when you retire. Indeed, Pension Freedoms have thrown up potentially more complex tax scenarios for people looking to access their pension savings. Factors to consider include:

  • How to take lump sums tax efficiently without pushing yourself into a higher tax band
  • Issues surrounding the Lifetime Allowance
  • The Income Tax you pay on your pension income
  • Realising investments and potential Capital Gains Tax liabilities
  • Issues surrounding potential Inheritance Tax if the value of your estate is more than £325,000.

Here’s a simple example.

If you have built up investments outside your pension, it may be sensible to use these to fund your retirement income in the early years, not your pension.


If you die before the age of 75, any pension savings can be passed to a beneficiary completely free of Inheritance Tax. If you draw your pensions first and leave your investments, your estate could be liable for a 40% tax bill on these assets.

A retirement specialist has the right tools to help you

So, back to the original question. Do you need a retirement or a pension specialist at retirement?

A pension specialist might be able to look at your various pots and make some assessments and recommendations.

What you really need, though, is someone who understands retirement.

Someone who knows about longevity and sequence risk, and what you can do to mitigate these risks.

Someone who can take a holistic approach to all your finances and structure an income plan that includes not just your pensions, but other assets as well.

Someone who is interested in what you want to do with your retirement and can therefore create a plan that supports your lifestyle aims.

A retirement specialist has the right tools to:

  • Plan with a purpose. The purpose is to ensure your financial security, and then enable the retirement you want. For example, a pension specialist might tell you to draw a fixed amount each year. A retirement specialist may help you plan to take variable amounts each year, based on your stated aims and objections. Want to go on a round-the-world trip in year five? Take more income that year.
  • Mitigate tax. For example, we use intelligent software that maps different scenarios which could result in considerable tax savings.
  • Understand your situation. We have helped dozens of clients to transition into retirement. A general practitioner who provides advice on mortgages, general insurance, and life cover is unlikely to have the same level of experience. Working with clients at retirement means we know the challenges you face and the opportunities you have.

Find out how we can help you to live the life you want in retirement. Contact us today or call 01372 404417.


Reviews and Ratings for Financial adviser Ray Martin, Kingston-upon-Thames

We’re highly rated

We retain a 5-star rating on VouchedFor, an independent service that enables clients to review their professional advisers. VouchedFor verifies the reviews and testimonials we receive, so you can be confident that they are authentic. 2018, 19, 20, 21, 22 and 23 Top Rated Adviser, as listed in The Times

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Our former financial adviser was retiring and recommended Ray to us. He alleviated the constant worry of where to best invest our savings without too much risk. We’re very pleased with the results over the last 10 years. He explains things in layman's language, which we appreciate, and gives us the confidence we have made the right choices. What more can people expect?


We had pension policies and investments that needed sorting out ready for retirement. We didn't know what to expect from a financial adviser. We assumed that he would simply advise us where to get the best deals. How wrong we were. Ray took us right back to basics. He made us carefully consider what we really wanted to achieve. He has allowed us to start to really enjoy our retirement.


I needed financial advice about pensions and investments as I approached retirement. My wife was in the same position. Ray Martin worked out a comprehensive plan for putting my pension provision and savings into proper order. He did the same for my wife. He has continued to provide us with advice ever since. Ray is always straightforward, open and proactive.


I was approaching retirement and wanting to look into limiting taxation and Inheritance Tax, as well as providing for my wife. Ray provided sound advice to switch from my current arrangement to a Drawdown Pension and ISA investments. I have now retired and have started seeing the benefits of his advice. The returns on my portfolio have increased beyond expectation. Ray performed extremely well.


I had sold my house and didn't know how to invest the money. Ray invested very wisely and there has been about a 5% increase every year. He listened to our queries, gave answers that we fully understood and followed any requests. He always had time for us, and never rushed us. We would have been financially at a loss without his help.


Ray has been advising my wife and me for about 20 years. He is everything one could hope for in a financial adviser: wonderfully enthusiastic, extremely well informed, completely trustworthy and scrupulously observant of the regulatory requirements. He is able to explain complex matters very clearly, and so far, his advice has always been first class.


I had money to invest and had no idea how to go about investing it and hopefully making a gain. I have three children and wanted advice about inheritance planning. Ray is very patient, very clear when he explains things, he is very interested in me as a person, totally trustworthy and is an excellent listener. We have never been disappointed! He`s been brilliant.


I had just been widowed. Ray sorted out and simplified what was a very complex set of investments into a much less confusing portfolio. I have been extremely happy with everything Ray has advised over the last 12 years. Whilst moving with the times, he has dealt with all aspects of my investments wisely and given me all the guidance and help I have needed.


As the financial director of a company, I was seeking to get advice on how to plan and invest for retirement. Without a doubt, Ray Martin helped me understand and plan how to fund my retirement. Ray has been with me every step of the way. His advice has been invaluable. I retired and achieved my annual income goal. His continued advice is helping me in the next stage of my life.


I needed some advice regarding my late mother’s estate. I had also retired and required advice on how to manage my private pension. Ray was extremely helpful, and his advice was very clear and easy to understand. I came away from our initial meeting feeling very relieved and less stressed. We have just had our first yearly review and I was surprised how well my investments had done.


In the last 10 years, my circumstances have changed with the passage of time. Ray has guided me on how to protect and make my money grow. He listens carefully to my needs and gives clear, concise advice in a professional manner. He and his team are always accessible and patient with my questions and their approach gives me confidence that my finances are securely looked after.


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