Considered one of the most 'stress-free' stages of an individual’s life, retirement also brings a whole list of concerns and questions that transpire into a very daunting and unfamiliar area of personal finance.

As we spend decades capitalising our income throughout various stages of employment in order to build our finances for NOW and later life, do we as a nation and even global entity, assume retirement will simply fall into place?

Montfort is exploring this ever-burgeoning question, and as such, is on a mission to ensure retirement is addressed early on to align with an individual's maximum wealth opportunity. As experts in retirement planning, Montfort is starting with the means to ensure a retirement that is tax efficient and thus what one should consider pre and during retirement. And with more and more retirees seeking a life overseas, thus requiring specialist global financial planning, the need for cross-border transitional solutions has never been greater.

“The first thing one must consider is how everyone’s situation is different and although one client’s circumstances may appear straightforward, the average client would have experienced five periods of employment throughout their life”, comments Jonathon Webb, pensions consultant at Montfort. “Each period is therefore likely to harbour very different pension-saving plans and associated complexities.”

Pre Retirement
Jonathon Webb further advises that pre retirement, one should maximise allowances as much as possible for tax-efficient savings. Including pensions, Individual Savings Accounts (ISAs) and more-specialist products such as Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EIS’) where these may be appropriate for the individual, and particularly so, for those of high-net worth.

“I am also a firm advocate of ‘pension CVs’ which are a fantastic way for an individual to develop their own account of their past pension savings to ensure aligned and appropriate to needs”, further recommends Jonathon Webb.

Such attention should incorporate an understanding of the type of benefits held within all pension pots such as any old Guaranteed Annuity Rate (GAR) products and any defined benefit or defined contribution company scheme arrangements.

“One should always be aware that older-style products may entail high charges and restricted funds available, and so it is advisable to consider whether it is worthwhile to consolidate into asset allocation which may be more appropriate – for example, increasing exposure to gilts or fixed interest should you be looking to take an annuity”, says Jonathon.

Montfort further recommends that one should consider their state pension entitlements for which a forecast can be provided by the Department of Work and Pensions (DWP) upon request.

During Retirement
Upon understanding your different existing pension arrangements, it should be possible to allocate or reshape your entire pension savings to maximise your returns and minimise tax charges at this point.

“An example would be policies with GARs which tend to incorporate restrictive income shapes i.e. arrangements that are only paid annually and in arrears without a spouse pension, however may offer a valuable income stream”, notes Jonathon.

Likewise, with defined benefit arrangements, though many people may ‘commute’ their pension for a tax-free lump sum, this may actually entail giving up a greater return overall.

Jonathon adds, “Given new pension freedoms with defined contribution arrangements, it may be more efficient to take any lump-sum requirements from these funds. However, bear in mind, tax will be deducted.”

For those planning or may have already moved overseas, Montfort’s managing director Geraint Davies further includes, “If you are a national or a citizen of another country currently based in the UK and who may retire internationally, specialist advice focusing on global financial planning is a must.

“What may be considered a very favourable financial position in the UK is likely to be very different for someone who plans a life overseas whereby even greater layers of complexities of varying cross-border regulations must be taken into account.

"Rules and legislations within this area are always changing with it near impossible for someone not within the industry to gage all considerations. Without expert planning, it is very likely an individual could face tax charges of up to 55% on their finances which is a worst-case scenario but so often happens unless advice is sought”, adds Geraint Davies. 


Montfort is a leading IFA that specialises in both domestic and global financial planning to focus respectively on retirement planning and tax efficiency. Feel free to get in contact with the team to discuss your situation by emailing or calling the office on +44 (0)1483 202072;

#retirement #tax #financialplanning

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