More than money: the questions our clients are asking about retirement
Retirement, income planning and the joy of giving – what our clients are thinking about this summer
MOST PEOPLE spend decades preparing financially for retirement: the pension contributions, the savings, the careful planning. And yet, in our experience, one of the most common challenges clients face in retirement has nothing to do with the size of their pot, but adjusting to spending it.
This is something we hear a lot at McHardy Private Wealth, particularly from clients who've worked hard their whole lives and built up significant assets along the way. The habits that served them well for decades – spend less than you earn, save where you can – can become surprisingly difficult to switch off.
“Baby boomers especially will have grown up knowing the value of a pound,” says Mark Thornton Smith, Director & Chartered Financial Planner at McHardy Private Wealth. “When you’ve spent a lifetime saving, it can feel genuinely uncomfortable to start taking income from your investments – even when the numbers clearly show you can afford to.”
It's more common than people might expect — and it’s one where good financial planning makes a real difference.
“When you've spent a lifetime saving, it can feel genuinely uncomfortable to start taking income from your investments – even when the numbers clearly show you can afford to”
Mark Thornton Smith, Director & Chartered Financial Planner
Getting the sequence right
For those approaching or entering retirement, one of the most valuable conversations we have is around income planning – specifically, how to draw income in the right order to make it as tax-efficient as possible.
“Income planning has been front and centre recently, with a number of clients retiring,” says Andrew Houston, Financial Planner at McHardy Private Wealth. “As clients consider stepping back from work – whether gradually or all at once – the timing of different income sources becomes increasingly important.”
Retiring before State Pension age, for example, can create an opportunity to make full use of the personal allowance. Bond withdrawals need to be managed carefully to avoid unexpected tax charges. Pension drawdown, ISAs and other assets each have their own tax treatment – and the sequence in which you use them can make a meaningful difference to how far your money goes.
This is where cashflow modelling tends to make the biggest difference.
“Cashflow modelling not only helps us plan the most tax-efficient sequence of income,” Andrew explains, “it also gives clients a clear, visual understanding of how their financial future is likely to unfold.”
“Often, the most rewarding part is simply seeing the people they care about benefit while they're still around to see it.
Andrew Houston, Financial Planner
The gift of giving early
One of the other themes we've been discussing with clients this summer is gifting, and particularly the anxiety that often surrounds it.
The seven-year rule – which determines how long a gift needs to be made before it falls outside your estate for inheritance tax purposes – tends to loom large in people’s minds. The concern is usually that making a gift creates a tax problem, either for the giver or the recipient, if something goes wrong.
In practice, with thoughtful planning, it rarely works out that way. “Clients are rarely worse off for having made a gift, even if it doesn’t fall outside their estate within seven years,” says Andrew. “And often, the most rewarding part is simply seeing the people they care about benefit while they’re still around to see it.”
It's a reminder that financial planning isn’t just about managing numbers, but about helping people make the most of what they’ve worked hard to build.
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Whether you’re approaching retirement, already accessing your pension, or thinking about how to support the next generation, these are conversations we have every day. If any of this resonates, we'd welcome the chance to talk it through.
