The value of advice at retirement

MoneyPlus Features Team

Getting financial advice is no longer only for people with complex financial affairs or the very wealthy – it’s becoming more accessible and affordable for everyone. We look at how taking advice when you’re planning your retirement can really help you make the most of your money – and your future.

Planning your retirement these days isn’t as simple as it might once have been.

For many people it used to be as easy as stopping work on your retirement date and starting to get a monthly income from your employer’s final salary pension scheme or buying an annuity (a guaranteed income for life).

Today there’s much more flexibility around how and when you can start taking money from your pension savings. And, while that gives you lots of choices, it can also raise questions.

The difference between getting an answer to those questions and getting the right answer for you is huge – and that difference is what can make professional retirement advice invaluable. In fact, did you know that the average person who gets financial advice is £41,099* better off in retirement than someone who doesn’t?

Peace of mind in uncertain times 

With so many decisions to make and questions that need answered, planning your retirement may seem overwhelming – particularly at the moment when there are so many uncertainties in the world.

But retirement should be a time to look forward to – a chance to spend more time with loved ones or do more of what makes you happy. And that feeling shouldn’t be overshadowed by concerns about where your retirement income is going to come from or if it will last.

That’s where retirement advice can come in. An adviser can help make the big decisions at retirement easier by showing you all your options and giving you the confidence that you’re making the right choices for your future.

Here are some of the things an adviser can help you with.

Understanding when you’ll be able to retire

You might find that you can retire earlier than you think, or that you can reduce your working hours and retire gradually. Even if you don’t plan to retire right away, understanding this can give you peace of mind about when you could give up your job if you had to or suddenly wanted to.

Understanding how much income you could have each year in your retirement 

An adviser will look at all your sources of income, including your pensions, your State Pension entitlement, as well as any savings or investments such as Individual Savings Accounts (ISAs). If you have rental income coming in from a buy-to-let property, they’ll also take that into account, as well as any equity in your home that you’re prepared to release, either through downsizing or equity release.

If you want to get started now, you can use our free retirement income report. In five minutes, it’ll give you an understanding of how all your life savings come together.

Use our retirement income report

Working out if you can still afford those longer one-off purchases or expenditure

You might think of retirement as a time when you’ll need to cut back on things like buying a new car or doing home improvements, as your income will be smaller. But that may not necessarily be the case. By looking at all your sources of income, an adviser can create a plan that covers both the necessities and some luxuries.

Helping to make sure that your money will last throughout retirement 

People are generally living longer, so your retirement income may need to last you at least 30 to 40 years. If you’re keeping some or all of your money invested in retirement, as many people are these days, you need to make sure that it’s invested the right way so that it lasts as long as you need it to. An adviser can help with this, and make sure that your investments remain on track, even when financial markets are volatile like they were earlier this year. Remember that all investments can go down as well as up in value, and may be worth less than was paid in.

Avoid paying too much tax on your pension 

No one wants to pay more tax than they should. But the reality is that some people do – for example by taking more out of their pension savings than they need to. An adviser can help make sure that you take your retirement income as tax efficiently as possible.

Remember though that tax and legislation may change, and your own individual circumstances, including where you live in the UK, will have an impact on your tax treatment.

But isn’t financial advice expensive?

Many people think of financial advice as being something only for already wealthy people because it will cost them a lot of money. But that’s not the case anymore – the good news is that financial advice has become much more accessible and affordable. In fact, you can get advice from the comfort of your own home, with many providers now offering online and phone support at a time that suits you.

So although there will be a charge, you could make much more of your retirement income, and get peace of mind that allows you to enjoy your retirement more fully.

How Standard Life’s Retirement Advice service can help 

There’s no one-size-fits-all approach to retirement. Different people will benefit from different options and an adviser will take your personal circumstances into account.

When our client, Julia**, came to us she was approaching her 66th birthday and was still working part-time. She wanted to know if she could afford to reduce the hours she worked in her current job and what impact this would have on her income when she stopped working completely. She also wanted to know what her options were about how she could take her retirement income.

Julia said she found all of the options quite a lot to consider and wanted our help in selecting the right one for her. We were able to take the pressure off, and set up a plan that would let her reduce her working hours, and give her the income she was looking for.

Julia has significantly increased her spending and now has peace of mind that she has a plan that aims to provide her with the income she wanted throughout her retirement. Remember though that the value of investments can go down as well as up, and may be worth less than was paid in.

Julia has also been able to buy the new car she needed, put aside some money in her bank account for emergency spending, spend some extra on home maintenance and repay a family loan.

Not sure where to start?

If, like Julia, you’re thinking of completely or partially retiring, but you’re not sure where to begin or what your options are – let us help you. At Standard Life, we have a team of retirement advice experts who can help you plan the future you want.

Your adviser will work with you to create a personalised and flexible plan. We know that plans and priorities can change, especially in the current uncertain environment, so our experts will make sure your plan works for you and can change as necessary, only putting it into action when you’re ready.

We’ll review your plan every year to make sure your retirement is on track and that your income continues to meet your needs.

You can get started by getting an initial retirement income report in just five minutes, or by booking a free, no-obligation consultation call with one of our experts.

Get your free income report
Book your free consultation

*Source: International Longevity Centre Advice Report (2017)

**Client name has been changed


Every customer’s situation is very unique and requires individual advice.

The information in this article or any response to comments should not be taken as financial advice. It’s based on our understanding in December 2020.