Retirement planning requires holistic approach

Flexible pension withdrawals are up 23% on the same period last year, says Peter Sharkey. Picture: G

Flexible pension withdrawals are up 23% on the same period last year, says Peter Sharkey. Picture: Getty Images - Credit: Getty Images/iStockphoto

Flexible pension withdrawals are up 23% on the same period last year, says finance expert Peter Sharkey.

I doubt I’ll attract a great deal of controversy when I say there hasn’t been much to enjoy about the pandemic. Nevertheless, it’s fair to say that the heavy cloud that descended upon us in early spring has revealed the occasional silver lining.

For example, our daily walks have become much longer, not because we’re walking further, taking a more challenging route, or slowing due to physical exhaustion, but because we now stop and talk to so many different people.

As lockdown began, my wife and I agreed we would walk the four-and-a-bit miles around the perimeter of our local country park every day, “until it’s all over”. Since late March, we have, with two unavoidable exceptions, kept to our pact, walking hundreds of miles; there’s been plenty of other people infused with a similar sense of purpose. Early ‘good mornings’ were soon appended with additional enquiries about health, the weather, reference to our co-walkers’ pet dog or, until they returned to school, their accompanying children.

The foundations of friendships had been laid.

Soon, enquiries became brief chats before they too developed into slightly longer conversations and, when the park’s café reopened, arrangements were made to meet there and enjoy a coffee. After her two boys returned to school, one lady shocked us by handing over a bulky package containing two bottles of very palatable wine. We were amazed and asked what this unexpected gift was for. “For chatting with the boys and me for the past 24 weeks,” she replied. It was genuinely touching. After talking with a lovely, slightly older, lady we discovered that her husband used to teach at my old school.

It transpired that instead of walking (he’s 88) he stayed in the car while his wife completed an hour or so on foot. “You must come and meet him,” declared the lady and so we did. Astonishingly, he hardly looked different to when he taught me chemistry some, ahem, 40-odd years’ ago – the last time I clapped eyes on him.

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When the café reopened, another couple, both teachers in their fifties, insisted on meeting there, post-walk, to discuss lockdown and their post-pandemic plans, a topic it was obvious they had discussed at length. In late August, the couple revealed that they were planning early retirement, intending to teach for another 12 months so as not to leave their respective schools in the lurch. We met again last weekend when the pair confirmed their plans were taking shape. They had checked the amount of pension they could each expect, though they anticipate having to supplement them.

Showing what good teachers they are by the extent to which they had researched matters, the supplementary income-yielding options the pair gave were possible part-time work; generating rental income by buying an investment property; releasing equity from their house and, perhaps their most ambitious alternative, winning the Euromillions.

They’re keen on mixing of the first three and keeping a few quid aside each week to have a dabble on the lottery. This seems like the most sensible, holistic approach to early retirement when relying on a single income stream could prove a tad too risky; diversification seems a much better idea. Early retirement is an option to which millions of people in their fifties and sixties have given serious thought over the past six months.

According to Moneymapp, number of people accessing the firm’s website to see how much equity they could release from their property has risen by more than 400% since June.

Meanwhile, recent reports published by HMRC and revealed that the UK has seen a rapid rise in the number of people accessing their pension pots or enquiring about doing so.

HMRC figures show that in the first quarter of this year, the number of people using flexible pension withdrawals rose by 23% compared with the same period last year; withdrawals are now higher than they have ever been. Unbiased reports that “the spike in demand for drawdown advice since the lockdown suggests it will accelerate from here.” This evidence raises questions about whether retirees’ savings pots will last for the duration of (hopefully lengthier) retirement, especially if funds are accessed earlier than originally planned. We can only conclude that a single-product solution is unlikely to sustain the level of retirement income required to meet people’s lifestyle needs and ambitions. The holistic approach taken by our teaching friends, examining the benefits of using a combination of existing pensions, rental income and equity release to generate longer-term retirement income is one which is likely to be taken by many more people as the population ages and the state pension comes under increasing strain.

How much could you release from your home? The figure is determined primarily by your age, health and the value of your home, which must be worth at least £70,000. These are the principle requirements, although alternative options exist based upon personal circumstances. You can get a very good idea of how much equity you can release by visiting the website and filling out the equity release calculator. It’s worth noting that equity release isn’t a panacea. It’s not suitable for everyone and it may compromise your eligibility for means-tested state benefits. Nevertheless, during these unusual times, exploring how loved ones may be helped or a meagre retirement income avoided makes enormous sense.

As many readers have already discovered, there’s a wealth of information to be discovered at: . In addition, there are hundreds of blogs and articles dealing with the subject on the Moneymapp website, including Peter Sharkey’s weekly blog, rated among the UK’s very best. Read more at:

You may still email any queries or questions regarding equity release to:

Please note that cannot advise readers on whether equity release is suitable for them. However, can introduce readers to professional advisers who will explain the process and its implications for your estate and entitlement to means-tested state benefits.


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