Pension planning - using adviser?

[Aloecanarias]

Does anyone have any thoughts as to whether it is possible or even advisable for only one person in the marriage to use the services of an independent financial adviser for retirement planning and future financial planning? And how even do you judge if you need an FA? I’m so scared at getting pension choices wrong.

Yes, of course you can.
We (as a couple) have an IFA who is worth his weight in gold.
However, he advises us on our personal and joint income/pensions.
Of course there is an overlap when it comes to things like Inheritance Tax .
We started using him as we got close to retirement because we each had our own occupational pensions and needed help with investments and IHT.

I have set up my own private pension that I can carry on with to 75, which is in addition to my full state pension and my small occupational pension.

Our decision to use a FA was initially on what to do with the final salary lump sum. And long term planning for old age.

Do you and your husband not agree or are you wanting to keep your own choices separate?

Thank you @SilverSurferNot. Not keen to give out all financial details to a third party and doesn’t see the value.

There is a HUGE value if it saves you money which it has done for us.
We pay by the hour for something very specific which can include a visit at home (if we want that) and an annual retainer for easy one-off questions.

I appreciate the confidentiality side that concerns your H as you do need to ensure you find the right person. Ours was through recommendation (several colleagues) and we trust him 100%. He doesn't 'sell' anything, so no commission, but advises.

Thank you so much for these insights @SilverSurferNot I will start to try to gather everything together as succinctly as I can and take from there. I don’t have personal recommendations yet but the person that I’m thinking of charges fees not commission.

Does your workplace provide financial advice when retiring? Mine did and put us in touch with an IFA who did a 3 hour group session followed up by a one hour one to one session. This was free but any additional advice was charged for.

thank you @LancashireButterPie
I appreciate the suggestion.

I attended a free session and looked at various free guidance but I found them limited really, which I understand because to advise they would need all the facts and figures. And they would need something from me too, in terms of how much will I need for , say, day to day living, holidays, or whatever.

Its those questions as to whether it is better to combine pensions, buy an annuity, do a drawdown, or something else, all of which I understand, but I can’t work out how to make the decision. I struggle with decision making anyway and fear of messing up.

One thing for example is planning to move, and not knowing immediately how much this will cost, and specifically when it will be.

DH and I managed our money separately until we reached retirement. I finally realised it was entirely pointless one of us having more than the other and we really had to work together.

It was actually seeing an IFA that made me see this, when they did a life plan for us. They did some work for us on initial planning but we have since become more confident in managing ourselves (helped hugely by what we learned) so we no longer have the IFA.

So in summary, I think they can give some advice on specific topics with just your information (e.g. ' pension A isn't invested per your risk appetite and pension B has much higher fees so would benefit from being consolidated) but it's not going to be possible to do your 'rest of life' financial plan (or plan tax wisely) without joint info. So it depends what your goal is.

Thank you @Chewbecca for sharing your experience. If I was single, I would definitely be open to the whole rest of your life guidance.

I would liken it to would you attempt to wire or plumb the house on your own - probably not.

no you don’t need to see an IFA as a couple - it generally gives better outcomes but not a requirement. I cannot do a decent cash flow forecast without the partners financial info but can help you invest according to your risk levels, structure income and advice on best options for saving for your own goals without a partner

Thank you @Puddingpiper thats reassuring to know, and I understand.

Only tied advisers charge commission and IFA charge fees. Find an IFA

I’m at this sort of stage and am not using an IFA. Much of my pension income is from a couple of defined benefit schemes so it didn’t seem as important as it might be if your entire retirement was being funded through a large defined contribution pot.

BUT whatever you decide it’s really worth educating yourself too. I’ve found the Meaningful Money podcasts and books very helpful - there is a new book on retirement planning you may find particularly useful. https://meaningfulmoney.tv/meaningful-money-retirement-guide/

Also, as others have said, it’s not very effective to think about only one half of a couple - especially when it comes to being tax efficient in how you’re taking your pension.

No one buys annuities now. Your money dies with you. Have a look for a Chartered IFA - they are the highest qualified people.

This is not true I’ve recommended two this week with guaranteed period and spouses benefits.

You can also have value protection.

All IFAs compare a lifetime annuity alongside drawdown as part of basic compliance requirements. 7 billion pounds were invested in annuities last year, I have seen rates as high as 9.5% per year.

Also a fellow of the CII is the highest qualified level for a financial adviser.

Annuities fell out of fashion but are back in favour again as rates improved. They can sit comfortably as one of your income strands.

Is it correct if a single person your annuity dies with you?

What is an average rate just now?

No, it depends on the terms of the annuity- you can have one that pays an income to a spouse or that pays out for a guaranteed period even if you die, or pays a lump sum. All depends what you choose.

Annuities can be a very good choice depending on circs- for example, creating a small guaranteed income stream that then lets you take greater risk with the rest of your money, or for older retirees who get much better rates, might not want to manage investments and might choose to buy an annuity with some of their money now and make gifts with the rest while still alive (and maybe save IHT).

It depends @lickingfingertastingfood

https://www.which.co.uk/money/pensions-and-retirement/accessing-your-pensions/annuities/annuity-rates-aQGfH6W5n2rm#best-annuity-rates-compared

https://moneyweek.com/personal-finance/pensions/605406/buy-an-annuity

if you are in the fortunate position to have other assets such as stocks & shares, ISAs, bonds and other pensions then why not use an annuity for one of your income streams. I am certainly considering it for my old SERPS pot given the change in IHT rules.

as @stayok says there can be a role for one.

Yes if you select single life with no spouse, guarantee or protection. An adviser will talk you through the risks very few are suited to a single life annuity.

people vastly underestimate their life expectancy for flexi access drawdown leaving many at a real risk of running out of money early.

As a warning to women. If your partner/ husband is receiving advice from an IFA without you being there there is a risk he will decide to have an annuity in his name only as having a woman on it will reduce the amount considerably as women outlive men as a rule. I had to break the bad news to widows left in a very poor situation quite often. They and their children were astounded and upset that their husband/father could do such a thing. (Women often presumed the annuity would continue but of course never checked.)

Our IFA is amazing. We consistently out-perform the market.

When he meets with us twice a year, we are both there. DH usually does all the interim emails, though they are copied to me.

Just seen all the replies and sorry for the slow acknowledgements. I appreciate each and every comment and you all taking the time to reply. I will certainly be gathering all the suggestions including annuities.

That’s so shocking - what devastating news to get, on top of a bereavement.

Thanks for info on annuities.