As he approached his nominated retirement age he began to receive letters from his various providers but these policies had never been reviewed and he had little sense of what he had and certainly did not want to retire. We undertook a review of his options and consolidated most of them into one plan with a defined investment strategy, leaving in place two which offered valuable contractual guarantees. He knows that he can access his funds at any time but has no need to, and is happy to leave them invested, knowing that under the new pension regulations the funds can be passed tax efficiently to his family on his death.

By being able to close his “pension input period” early and to take advantage of the opportunity to carry forward unused allowance from earlier years, he was able to pay £100,000 into his pension plan. As he was a 50% taxpayer at the time, this contribution only cost him £80,000 at the point of investment and he was also able to claim a further £30,000 tax relief via selfassessment.

After undertaking a review of their position we recommended Mrs Rutland make an investment of £250,000 into a flexible Trust. Once this gift is seven years old, the value of the investment will fall completely outside of her estate and therefore reduce the potential inheritance tax by £100,000. However if at any time, access to the capital is required, she is able to draw on a part of the investment each year and is ultimately able to recover the whole of the value of the Trust over a number of years should it be required. This is unlikely to be the case unless it is needed for spending on care or medical costs but equally, parts of the Trust can be gifted to family members at any time if that is what she chooses to do.

The Financial Conduct Authority does not regulate Trusts or Inheritance Tax Planning.

Added to this, their home was worth £1m and this meant there would be a significant liability to inheritance tax should the worst happen to them both. However their children were still in education and Mr planned to work for a few years yet, plus they had plans to use their capital to buy a holiday home overseas. We were able to put in place a low cost whole of life policy within a trust, which would ensure that any inheritance tax bill would be settled on second death. This is not a permanent solution and it will need to be reviewed as their future plans take shape but it means they have full, unfettered access to all of their assets in the meantime without having to worry about inheritance tax.

The Financial Conduct Authority does not regulate Trusts or Inheritance Tax Planning.

Following careful assessment of the substantial transfer value available, the pros and cons of a secure income versus a personal pension fund where the capital is at risk and discussion of the client’s long term objectives, we recommended that he transfer to a personal pension plan. He is now able to draw flexibly on the fund whenever he needs to and can look forward to retirement knowing that however long that lasts, his remaining fund can be passed to his family. Transferring out of a final salary scheme is rarely appropriate and it is vital to take professional advice.