Case study: set for retirement

The couple wanted to achieve a joint annual net income of £75,000 throughout their retirement, and tax efficiently pass on their estate to their children.

Bill is 66 and Hilary is 64. They were both born in the UK and have always lived in London, enjoying married life in Islington. Of their two adult children, one is married with a child. They presented us with full details of their financial assets which included: defined contribution pension funds of £800,000 and £500,000 respectively; a joint investment portfolio of £2 million; and ISAs to the value of £200,000 and £150,000 respectively. Bill also holds some venture capital trusts (VCTs), worth £400,000, and receives an income of £50,000 from a couple of non-executive director positions. Hilary is fully retired, and volunteers for a number of charities. Their home is valued at £1.75 million, and there is an investment property worth £500,000.

They came to Nedbank Private Wealth to seek advice to help them achieve the following goals: to generate a joint annual net income of £75,000 throughout their retirement; and to minimise their estate’s exposure to inheritance tax on their death.

The planning process

The team suggested a review of their last wills and testaments, given these had been drawn up a number of years before and prior to the birth of their grandchild. They also had lasting powers of attorney registered. Lifetime gifts using the annual £3,000 exemption were set up, and a provision was made to fund their grandchild’s private education using the ‘normal expenditure out of income’ exemption.

A life insurance policy was taken out to cover any inheritance tax due, given this is required to be paid before probate is granted and ahead of the distribution of the estate by its executors.

We provided pensions’ advice to consolidate their various schemes in self-invested personal pensions (SIPPs), as well as transfer over the ISAs, to Nedbank Private Wealth’s investment management service.

The results

As part of the planning process, Bill realised that he could afford to retire from his non-executive directorships and be able to enjoy retirement, and write satire. We were able to help them to structure their retirement income in an efficient manner, by ensuring they were using all available allowances, and also advise on the order in which income should be taken from their various investments and pensions. The general rule being to draw income first from those investments which are the least tax-efficient. They left their individual SIPPs to accumulate tax-efficiently, given that these are not considered part of their estate for inheritance tax purposes, and so can pass down the generations.

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how wealth planning can help them achieve their financial goals and objectives, or call +44 (0)1624 645000 to speak to our client services team.


If you would like to find out more about how we can help you with wealth planning support, please contact us on the same number as above, or complete the contact us form using the link below.

Investment values can go down, as well as up, to the extent that you might get back less than you originally invested. The value of your investments may also be affected by exchange rates. The inclusion of any investment structures and wrappers is for information only and should not be taken as advice or a recommendation. You should seek the necessary advice, specific to your circumstances, before making any financial decision. 

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