We spend many years working, planning and dreaming about retirement but when it comes, what next?


In order to enjoy our lifestyle in later life while also overcoming new challenges such as illness, bereavement and dementia, we need to ensure we plan our finances well in advance. In 2013, 66% of the population had not sought professional financial advice on investments, pensions or retirement*.


Research has shown that attitudes and outlooks were a major factor in whether people were happy in later life. A positive attitude to ageing can increase life expectancy by 7.5 years. Planning and keeping yourself busy and staying connected can help achieve that.


We are all living longer. There are 11.6 million people aged 65 and over living in the UK** and they are staying healthier for longer. This is set to increase by over 40% in the next 17 years to more than 16 million***.


Retirement planning

Changes in longevity mean we can expect to spend longer in retirement. For example a person who retires at 65 in 2035 will have a 1 in 4 chance of a retirement lasting three decades****.


Professional financial advice will help you to consider all the available retirement income options. Flexibility is key here as this will ensure you can adapt to your changing needs throughout your life. Most people qualify for at least some State Pension when they reach their State Pension age. This provides you with a secure income for life which increases by at least the rate of inflation each year.


Inheritance Tax planning

Careful inheritance tax (IHT) planning could significantly reduce the amount your beneficiaries pay on your death. In 2015-2016 HMRC received £4.6bn in IHT receipts which is a 22% increase on the previous year*****.


IHT is assessable on your assets on death. There’s normally no IHT to pay if either the value of your estate is below the £325,000 threshold or you leave everything to your spouse or partner. Planning to mitigate IHT is a complex area where advice is important. Recent changes such as the introduction of a Residential nil rate band have meant that planning properly is essential.



There are a whole range of investment strategies that can be adopted to meet individual objectives. Capital preservation, income generation or a balanced approach between the two are possible.


The interaction between the various asset classes and the tax treatment of each is a core component of a flexible investment strategy that will see you through later years.


Care fees

Many of us will face the challenge of ourselves or a loved one needing care. This can take many forms from informal care carried out by a spouse or relative to more formal care offered by a professional. Currently only those with assets of £23,250 or less in England and Northern Ireland are entitled to some form of state support.


Funding for long term care for those whose income does not cover costs can take many forms:

  • Immediate Care Plans are specially designed tax efficient financial policies to cover care fees by covering the shortfall between income and the cost of care for the rest of your life.
  • Deferred Payment Agreements where the local authority allows you to use the value of your home to help pay for care home fees. The local authority usually ensures that the money you owe in care fees will be repaid by putting a legal charge on your property.
  • Renting your property and use the rental income to cover care fees.
  • Equity Release allows you to release equity from the property to either pay care fees directly or use the proceeds to invest in an immediate care plan. There are two main types – lifetime mortgage and home reversion plans.
  • Cash deposit accounts from which you can draw on the money to meet surplus costs
  • A structured approach to Investment Planning will enable you to effectively use your capital to supplement care fees. 

Estate planning and wills

An up to date will that reflects your current wishes is essential to ensure that on your death your assets are distributed to your loved ones in the most efficient way possible.


Lasting Power of Attorney

There are two types of Lasting Power of Attorney. One takes care of your assets and financial affairs – this is known as a Lasting Power of Attorney for Property and Financial Affairs.


The other type of Lasting Power of Attorney is a Lasting Power of Attorney for Health and Welfare. This type of LPA enables a nominated family member or friend to make decisions on your behalf regarding your day-to-day care and wellbeing.


The value of your investments can go down as well as up and you may not get back the full amount invested. Your capital may be at risk. All statements within this article concerning tax treatment depend on individualcircumstances and are based upon our understanding of current tax law and HMRC practice and may be subject to change. This article is not intended to constitute personal advice and no action should be taken, or not taken, on account of the information provided.
* PFS 2014
** Mid-2015 Population Estimates UK Office for National Statistics, 2016
*** National population projections for the UK, 2014-based, Office for National Statistics
**** Dr Patrick Nolan Chief economist, Reform
***** HMRC July 2016