Client case study: How one of our advisers helped their client gain clarity and control
When Mr Walker found himself in a complex and frustrating situation with his pension, we were able to help him where his previous pension provider had fallen short.
Last Updated: 4 December 2023
It’s my firm belief that the primary role of an adviser is to make complex decisions easier.
My client, Mr Walker came to me with an especially complex pension decision.
He wanted to transfer out of his existing pension scheme. Although the decision to transfer out can be tricky, the process of doing so is normally smooth. But Mr Walker held a specific type of pension which requires both careful thought and a lengthier process to get out of.
When Mr Walker’s request was refused without much understanding of his unique circumstances, he came to me understandably frustrated. He felt he hadn’t been listened to and hadn’t had much explanation of his options.
Is financial advice for you?
If you find similarities to your own situation in this case study, there are still likely to be some differences which mean you’d need to make different decisions. This case study is an illustration. Please don’t use it to make personal decisions. Always seek financial advice if you’re unsure.
Investments go up and down in value and you could get back less than you invest.
Difficult but not impossible
Provided you’re in a run of the mill pension scheme, your provider should make it easy to transfer out. Similarly, at HL, we make it easy for you to transfer your pension in.
Mr Walker was at his wit’s end. He understood that his pension was out of the ordinary but he felt let down by his pension provider’s lack of empathy and defeatist approach.
There’s no doubt that the situation was delicate and full of complexity. But it certainly wasn’t impossible as Mr Walker was starting to think.
The trigger for him wanting to transfer out was related to his health. Which is a very understandable reason for wanting more flexibility and control over his pension.
The challenge was navigating the terms and conditions of his pension scheme in order to free him from it without penalty.
Saving my client time and energy
Before speaking to me, Mr Walker was tired of going round in circles. And with his specific type of pension and circumstances, if he were to keep trying to transfer by himself, he would have run into further headaches digesting the effects of transferring out and completing the paperwork needed to do so.
I had the pleasure of meeting Mr Walker and his wife four times. During which we spoke at length about the options available. I wanted Mr Walker and his wife to have full confidence in their next steps and I would have met with them 40 times if that’s what it took.
As well as being knowledgeable and professional, one of Adam’s strengths is his empathy and patience. He understood my frustrations and made a complex topic understandable.
- Mr Walker
Why transferring his pension was important
Mr Walker’s current pension scheme didn’t offer him the flexibility and control he wanted. The income it generated would need to change as his situation changed. He currently enjoys working part time on his own terms and plans to continue his work for as long as he possibly can.
While he still has a working income, this has allowed him to defer his state pension and for now, he doesn’t need to access his pension. This means he’s able to keep contributing to his new pension and leaving it with the potential to grow for longer.
Under his old scheme, he wouldn’t have had such flexibility and the income wouldn’t change in line with a change in his working hours.
Other planning considerations
Of course we had to look at Mr Walker’s retirement plans. That meant getting together some details of regular and essential expenditure plus an idea of any other big outlays on the horizon.
Getting the big picture of his retirement was essential in taking the decision to transfer, to defer his state pension and not access his new pension just yet.
But Mr Walker also had other things to consider such as the tax implications of his pension being inherited. Initially by his wife but then his son.
I was also able to help him make the most of some of his other tax allowances but this was very much a small cherry on top of the cake.
Please note: tax rules can change and their benefits depend on your individual circumstances.
Investment advice
An essential part of transferring a pension is making sure the new set up is suitable for your needs and objectives.
With that in mind, I went about structuring Mr Walker’s new pension in line with his risk tolerance, income requirements and how involved he wanted to be with his investments going forward. I included a mix of managed and unmanaged funds and explained the other ways I diversified his portfolio.
Please note: Investing isn’t for everybody. Investments can go up and down in value and you could get back less than you invest.
What next for Mr Walker?
“What drew me to HL in the first place is your transparency and trustworthiness. I also find the free information you provide very useful. Now I’ve also experienced your extremely helpful financial advice service too, I’m happy to manage my own affairs again for now. But there are things on the distant horizon such as downsizing my home at which point I may seek Adam’s help again to re-evaluate my options” - Mr Walker
Pension and tax rules can change, and any benefits depend on your circumstances. If you’re a Scottish taxpayer, different tax rates and bands can apply.
Could our advisers help you?
If you’re unsure about your financial future or whether you’ve got the right financial strategy in place, our advisers can help. Like Adam helped Mr Walker, any of our advisers can assist you in making complicated decisions and give you confidence you’re on the right path.
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Book a call with our advisory helpdesk to find out more about how advice could help. They don’t provide personalised advice but they’ll help you decide if advice is right for you and explain the charges involved.
This isn’t personal advice. Tax is a complex subject, so if you're not sure what’s best for you, you should seek professional advice.
