Scared for retirement after seeing an IFA

Money into a pension will incur charges on 25% out but you get the tax relief on the way in.

St James Palace have an unfortunate reputation and I'd be extremely careful taking advice from one place.

It sounds like you're listening to the warnings about SJP which is good, but in case anyone here is wondering, google these words: st james place scandal. They have a dreadful reputation which is rightly deserved.

Fair enough.

St James Place are for very wealthy people so I would not take too much notice of what they say. Go on to the MSE forum pensions board to take advice or look for another IFA. You have £100k accessible money and a £300k pension pot but obviously are still relatively young. If you are only planning on working for another 3 years presumably that means if you retire at 55 you have to cover 11 or 12 years until your state pension kicks in and tops up your income.

First you need to work out how much income you need to cover outgoings each year and build in inflation proofing. Obviously you need to decide whether you will use part of your savings or 25% TFLS if you take it to pay off your mortgage or whether you will move out and downsize. That is what I would do if you are not wedded to staying in London as that will release some equity to top up your income.

Can you take flexible retirement whereby you go part time? That may delay you having to draw on savings or your pension?

You should be able to access your pension at 55 (due to increase to 57 at some point I think) so I would say it is tax advantageous to maximise putting money from your salary in there from now until retirement.

I don't think you are in as bad a position as your IFA suggests.

Speak to someone independent not SJP they are awful

OP, I echo the above comments. It would be best for you to find an independent financial advisor. This is exactly what I did, and my situation isn't massively dissimilar to yours. See here for a couple of recommended search websites: https://www.moneysavingexpert.com/savings/best-financial-advisers/

I'm not trying to be unsympathetic but I don't quite understand why you feel you are in such a bad financial position. You more or less own a property worth 500 - 600k, you've got £100,000 in an ISA and a pension pot of £300,000. You will quite likely get PIP which will give you around £700 per month which is not means tested and you can continue to work whilst claiming it. You will get your State Pension when you're 67 which currently is worth around £800 per month.

Am I missing something?

@Floofydawg SJP may well be legit. However the person who contacted the OP may not. If you look at the FCA's pension scams leaflet it lists some red flags that are included in the OP, such as someone contacts you, free pension reviews, transfer to them. All I am.saying is check everything out properly before going ahead. Red flags are present

Definitely look at applying for PIP. As pp have said, it’s not means tested and it’s absolutely possible to be eligible whilst still working.

There is lots of advice out there about filling in the form. The mistake people make is listing all their diagnoses, rather than how their life is affected.

You are in a great position. I clicked on this thinking you might be someone with an actual problem.

If you need to retire early, the obvious strategy would be to sell your flat, buy a flat or house in a less overpriced part of the country and take the train to London for occasional hospital visits.

It's not a scam but it's definitely not independent advice and they are just in it for the commission. I made the mistake of seeing a SJP advisor and he tried to pressure sell me their investment products. Luckily I did research and didn't invest a penny with them.

The red flag to me is that THEY contacted YOU. They're also suggesting you transfer your full pension pot to them. Don't do it, could be a scam!!

Please reconsider OP- this company have been investigated for mounting customer complaints, and have recently had to pay out large amounts of compensation (articles freely available in the financial media)

There is some good advice here, plus I'd look at somewhere like money saving expert MSE (I don't always like Martin Lewis but he is an expert in this field) as a starting point

If you think you need more advice, get some personal recommendations or MSE to direct you to a reputable person

Good luck and please don't panic unduly- you are right to look in to this. See it as you being diligent and putting together a plan- better than burying your head in the sand and ending up in a mess

Choosing a financial advisor is a very big decision…I talked to 4 or 5 before I settled on someone. Saw someone from St James Partnership who I didn’t trust at all.

You’re best off with a truly independent financial advisor (IFA) and I don’t think St James are independent.

You actually sound in a strong position financially, and it may be possible to do equity release from your flat when you’re older as well. Do you expect to give up work entirely because of your health? You can get a state pension forecast from DWP. Talk to several advisors, I don’t think you need to rush into this.

This. I wouldn't move the while £100k of ISA savings to your pension but if you're not maxing out pension contributions then it could be worth looking to move some into a SIPP. You'd get tax relief added and could draw down from 57 and if you're not earning then would be potentially under threshold. £100k in cash ISA sounds a lot to me so do make sure you are getting a decent rate on that.

@PensionMention pension money is only taxable when you draw on it and depending on your annual allowance and tax position you will probably get tax relief added to pension contributions. Some people then draw some of the money when they are non tax payers (no other income) so can draw £12K pa tax free. I am not saying this is the best thing for the op but it's not always the worst move for everybody. OP, Ring a few advisors, tell them the sort of advice you are looking for and ask what they would charge you.

I know it ses counterintuitive, but paying off a mortgage isn't helpful other than for peace of mind. The interest on your mortgage will be a smaller rate than a good no risk savings account, if you put £500 away a month for the next 3 years you'll have another nearly £19k if you can get 5% interest, which will be enough to defer taking your pension for a year which will help you. He's right about not worrying about the mortgage and trying to beef up your pension pot.
do you have any critical illness coverage or income protection? I guess not with previous ill health. If you are disabled on a day to day basis it would be worth looking at PIP but you do need to be pretty disabled to qualify, not just struggling a bit at times.

OP. Have a look at moneyhelper.org.uk it's an impartial website from an arms length government body. (The Money and Pensions Service). There is loads of useful information on finances, pensions ill heath etc.

Do not move your ISA money in to your pension. It becomes taxable as soon as you move it in to your pension, it’s in a tax free wrapper currently.

I would get a lodger, maybe go for a midweek one only. Then you get the house to yourself two days a week. You can earn its 7k a year tax free doing this plus they have no real rights as in your own home.

Your best bet would be to move when you stop working to another part of the country or just further out of London. Where I live you could buy a nice albeit small semi detached house with a garden for 250k.

I am not an IFA but DH and I have set ourselves up very well for retirement. I do not trust them as far as I can chuck them.

It depends what mortgage rate you have.

lodger can be awkward but having the option is good.

Financial advisor sounds highly biased, would have thought that paying off mortgage would be the first priority.

At least you will own your own place - it would be good to have any disability benefits sorted now.
Can you draw your private pension before your state pension? It’s the gap that is difficult if you’re unable to work.
Lodgers sound good but in practice it can be really hard to share your home.
I too would be wary of financial advisors wanting to move your pension - they’re sure to profit from it not you.

You’ve already had good advice here. If your health condition gets to a point where you can’t work, or even can only work part time, then you should be eligible for PIP which can be quite substantial. If your non-pension savings fall below £16k you might also get Universal Credit with no obligation to look for work.

How expensive is your mortgage? If or when the fixed rate expires it might end up costing more in interest than you’re earning on your ISA, at which point you should think about paying it off.

If you’re in London there should be lots of demand from professional people for a room during the working week. Sometimes people only want Tue-Thu, to let them work three days in the office if they live further away. This income is also tax free up to £7,500 a year (Google “rent a room scheme”).That could make a big difference. There are websites which help you find lodgers like this.