Good Financial Planning – A Case Study

“Thanks Mike, we got £7,800 back from HMRC and my pension is going to pay out this year too.”

This is the opening line from a call I received from somebody who I met just once, 18 months prior and the best part, it was following an initial meeting that did not cost them anything; writes Michael Hawthorne, Chartered Financial Planner at True Bearing Chartered Financial Planners.

Retirement Planning

The reason for the initial meeting was to discuss retirement planning. Like many that I meet a few years from retirement, he wished to know whether he was on track to have enough retirement income.

Our first discovery meeting is an opportunity for both parties to ‘get to know’ each other, to ascertain whether financial advice is required and whether it is needed immediately. He shared his desire to retire aged 60 but importantly, did not want to sacrifice his and his family’s lifestyle.

A jigsaw puzzle

Like a jigsaw puzzle, we start to put together lifestyle, aspirations, changes that come with age, changes to income and expenses and are able to visualize retirement.

It was clear that there was sufficient money to be able to live the desired lifestyle in retirement. With just 2 years until ‘R-Day’, we agreed that no changes were required immediately but a strategy would be needed to transition into and beyond the next chapter of their life.

Final Salary Pension

He had a question about a Final Salary pension. The employer looked to be in financial hardship and he was offered a reduced transfer value. However, if the scheme was taken over by the Pension Protection Fund (an insurance policy for company pensions), he would be better off than taking the reduced transfer value. That materialised and later this year, he will receive a tax-free lump sum equal to that of the reduced transfer value and an extra £200 per month, index linked for the rest of his life. A decision which will no doubt be worth tens of thousands of pounds.

Higher Rate Tax Relief

Whilst answering his questions about retirement pensions, I was also able to make some other observations. This person had never submitted a tax return. This meant that he never received Higher Rate Tax Relief on his contributions, a total of £1600 per year. A call to HMRC and after a few weeks, £7,800 was returned. It was backdated 5 years but there were still many years which could not be claimed. A bittersweet windfall for his retirement savings.


If I was paid £1 for every time somebody said to me ‘I needed to have met you 10 years sooner’, I would be a very rich man. For most, I believe that Financial Planning is misunderstood. A financial planner is the architect of your finances. Investments, pensions, tax, insurance and many other aspects are just different components of the build. They will work with you to build a secure future and listen to what you value the most. They will suggest ways to get there efficiently or improve the efficiency of your existing plan.



An hour with an experienced financial planner could literally be worth thousands of pounds. With a free initial consultation, why wouldn’t you? To arrange your FREE, no obligation appointment please call us on 01257 260011 or Contact Us.