How we helped a client take their income in retirement in a tax efficient way


Stephen is age 70 and has recently decided to retire after working for 30 years in a management position for a large national company. His primary aim is to generate a net income of £40,000 per annum in retirement from his State Pension income of £10,000 and his personal pension of around £700,000.

After reviewing the different retirement options available and testing these against Stephen’s individual circumstances and attitude to risk, we identified that UFPLS payments would be the most tax efficient method to provide a sustainable net income of around £30,000 per annum. Using our cashflow planning software we produced a number of projections to show how Stephen’s objectives could be achieved using UFPLS, including a comparison with other forms of taking benefits

Taking withdrawals in this manner enabled Stephen to meet his net income requirements through monthly payments combining his available tax-free cash and taxable income. By taking part of his tax-free cash in each payment, Stephen has been able to avoid paying higher rate Income Tax on the taxable portion of his income whilst retaining the flexibility to take part of his tax-free cash as a lump sum in the future if this is needed.

As part of our ongoing service we review Stephen’s position on an annual basis to ensure that the current strategy remains the best method of meeting his objectives.

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If you have any financial planning needs you would like to discuss with our expert team, please do contact us today.

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