Case Studies

Discover how a SIPP can help people to see much greater returns on their investments and create a more secure future for themselves.

EXAMPLE 1

Mark is a 55 year old male who over the years has acquired 3 separate pensions with a total value of £200,000. His wife, Anne is also 55 and has no pension provisions. Mark has taken his £50,000 tax free sum leaving a balance of £150,000.

OPTION 1

  • Mark takes out a single life annuity for maximum immediate income
  • This will give him £7952 per annum or £662 per month.
  • This will die with Mark, leaving Anne to rely on the state pension income.

OPTION 2

  • Mark takes out a joint life annuity which will give a joint income of £7952 per annum or £662 per month.
  • If Mark dies first, which is almost certain, Anne’s income will be reduced to £6535 = £544 per month.
  • This will die with Anne  (or vice versa)

OPTION 3

  • Mark decides to look at pension drawdown sometimes known as pension release.
  • This allows Mark to access tax free cash from his pension.
  • Mark can take up to £11,340 per annum = £945 per month.
  • Common sense must be used so as not to take too much income initially. The pension is still invested at this stage and investments could go down as well as up.
  • The maximum income is reviewed and recalculated every 3 years.
  • Mark’s 3 separate pension funds can be transferred into one single income drawdown plan for ease of administration and to cut down administration fees.
  • On Mark’s death, Anne will receive 100% of his fund.

OPTION 4

  • Mark could transfer his separate pensions into a SIPP (self invested personal pension). As described elsewhere on our site this allows him control over how his money is invested.
  • He could invest C£99,000 into a selection of very attractive investments with great potential for growth. (this is a figure for the purposes of this example only)
  • This will leave him with C£51,000 in a cash fund within the pension.
  • With average returns of 10% he could earn £9865 = £823 per month.
  • The SIPP also allows him to take drawdown from the fund.
  • Mark’s fund will benefit from income from the assets as well as capital growth..
  • When Mark dies, the investment WILL NOT DIE WITH HIM. The fund will pass to Anne and then in turn to children or wider family members,

So you can see that there are several options for most people to consider.

Contact Alexanders today if you want to consider your options.

Contact us

Call us on 0800 772 0676, email us or arrange for one of our advisors to give you a call back.

Case Study

Discover how our SIPP and Alternative Investment advice has helped people to see much greater returns on their investments and create a more secure future for themselves.