Retirement planning - tax and wealth advisors in London, Kent and Sussex

Planning for retirement

Retirement planning and wealth management advice in London, Kent and Sussex

Having a comfortable retirement takes financial planning to achieve, which can mean making personal pension arrangements to supplement your savings and what the State will provide.

Government incentives mean that putting money into a pension is still one of the most tax efficient ways to save.

The sooner you contribute, the longer your money has to grow.

Exactly what type of pension scheme to choose will depend on factors such as your time until retirement and likely income levels you want or need when you get there.

Seeking expert retirement planning advice can be incredibly valuable in helping you to prepare for your retirement and to optimise your finances accordingly. As a full service accountancy firm, we can look at your circumstances holistically, bringing in the relevant experts from across our firm to maximise your long term financial opportunities, giving you peace of mind. A retirement accountant can also plan the timing of pension withdrawals, savings and other income so less of it is lost to tax.

How our accountants help with retirement

Retirement planning works best when tax, pensions and cash flow are looked at together. Our accountants work alongside our financial planning team, so each decision is made with the full picture in view.

Tax: We look at how your income will be taxed once you stop working, from pension withdrawals and the State Pension to rental income, dividends and savings interest. Planning the order and timing of withdrawals can keep more of your income in lower tax bands and help you avoid thresholds such as the £100,000 point where your Personal Allowance starts to reduce.

Pensions: We review your contributions against your annual allowance and any carry forward available, check whether tapering or the money purchase annual allowance applies to you, and help you decide how and when to draw your benefits.

Cash flow: We project your income and spending through retirement, so you can see how long your savings are likely to last. You can also test decisions such as retiring earlier or reducing your hours before you commit to them.

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Explore our full range of financial planning services

Planning for the future can help to give you peace of mind that your financial affairs are in order, not just for retirement but also leaving a legacy for your family and ensuring there are certain protections in place to make sure your wishes are taken care of. We provide a full range of financial planning services, so click below to find out more.

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Retirement planning - tax and wealth advisors in London, Kent and Sussex

Ways to save for retirement

Anyone automatically enrolled into a workplace pension scheme benefits not only from their own pension contributions, which get tax relief, but also a minimum level of employer contributions.

Some employers also offer Salary Exchange in return for their greater pension contributions, which immediately provides tax relief at your highest marginal rate.
You can, of course, opt out of your employer pension scheme and avoid any deduction in salary. Whilst this can be tempting, especially with so many other financial commitments during a working life, it is unwise.

Every year delayed in making contributions can delay by five years the time until you can retire with the lifestyle you want.

If you have a Final Salary policy, or are still accruing benefits, the best advice is to stay put. These are the gold standard of workplace pensions. Extreme care is needed if considering transferring to an alternative policy, you may lose valuable benefits without realising if you don’t seek financial advice.

Understanding your State Pension

For most people, the State Pension will form part of their retirement income, though rarely all of it. The full new State Pension is £241.30 a week for 2026/27. To receive it, you normally need 35 qualifying years of National Insurance contributions or credits, and at least 10 to get anything at all.

State Pension age is rising from 66 to 67 between April 2026 and April 2028, so it is worth checking your own date and forecast on GOV.UK. If there are gaps in your record, voluntary National Insurance contributions may increase what you receive, but it is worth checking first whether a top-up would make a difference in your case.

Investing pension contributions

You should view a pension policy as a long-term investment. There are also annual and total lifetime allowance amounts that can be saved to ensure you attract tax relief. Charges apply if these are exceeded. For most people, the annual allowance is £60,000 a year, although it can be lower for high earners or anyone who has already started taking taxable money flexibly from a defined contribution pension.

With numerous funds available to invest in within a pension portfolio, the general advice is to select higher-risk investments the further you are away from retirement and take a more cautious approach when nearing it. You may find that your individual attitude to risk changes at different stages in your life so regular reviews are important.

Tax-efficient saving beyond your pension

Pensions are not the only tax-efficient way to save for later life, and the money in them is usually locked away until at least age 55, rising to 57 from April 2028.

ISAs offer more flexibility. You can put up to £20,000 a year into ISAs, the interest, dividends and gains inside them are tax-free, and you can take money out at any time without a tax charge. From 6 April 2027, savers under 65 will only be able to hold up to £12,000 of that allowance in cash, with the rest going into stocks and shares or other ISA types.

Outside an ISA or pension, each person has a £500 dividend allowance and a £3,000 capital gains tax annual exempt amount. Basic-rate taxpayers can also earn £1,000 of savings interest tax-free, or £500 for higher-rate taxpayers. Couples can make use of both sets of allowances by holding investments in the right names. Using these allowances each year, alongside your pension, can reduce the tax you pay on investment returns before and after you retire.

Kreston Reeves provides a full range of Corporate tax advisory services, with offices based throughout London, Kent and Sussex.

Taking pension retirement benefits

There are a number of options when the time comes to retire, depending on the pension policy. These are:

  • Tax free cash, currently a quarter of the value of a fund, with the balance taxed at your marginal rate.
  • A scheme pension.
  • Flexibly accessing the accumulated fund.
  • Buying an annuity.

Each method has its benefits, depending on your circumstances. But there are also longer term considerations.

Providing for dependants

Pension wealth built up throughout a working life can be lost when you die and not go to loved ones. The use of a Will is often viewed as a guarantee of wishes upon death. However, pension schemes cannot be bequeathed in them. Instead, Trustees of the scheme have discretion over who receives the benefits available. This makes it important to keep your pension Death Benefit Nomination and Expression of Wishes up to date. As retained pension benefits are normally free of Inheritance Tax this can also be a useful estate planning tool.

From 6 April 2027, most unused pension funds and death benefits will be counted as part of your estate for Inheritance Tax, with your personal representatives responsible for working out and paying any tax due. Death-in-service benefits remain outside the charge. If your plans rely on passing your pension on untouched, they are worth reviewing before then.

Gifting during your lifetime can reduce the value of your estate. You can give away £3,000 each tax year free of Inheritance Tax, and regular gifts made from surplus income can also be exempt. Larger gifts generally fall outside your estate if you survive seven years after making them.

Trusts can give you more control over how and when wealth passes to your family. Their tax treatment is complex, so they should be set up with specialist advice.

As retirement nears you may find it sensible to minimise or eliminate any debt and consider any later life care provisions you may require.

Business owners often fail to set up pension plans for themselves, assuming that the sale of their enterprise will fill that role. However, this can be a risk if retirement means a sale is attempted during a market slowdown – or if the value of the business is heavily dependent upon your own skills and involvement. It’s also common for business owners to place too much reliance on their own estimation of the sale value of their business. Sometimes the market may not agree: so it’s wise to speak with a corporate finance expert well in advance.

Succession planning starts with deciding how you want to step back. A sale to a third party, passing the business to family, a management buyout or a sale to an Employee Ownership Trust each comes with different tax consequences and timescales. The right route depends on what you need the business to fund in retirement.
Tax rules affect the timing too. Business Asset Disposal Relief now taxes qualifying gains at 18%, up to a £1 million lifetime limit. For Inheritance Tax, 100% Business Property Relief is now limited to the first £2.5 million of qualifying assets, with 50% relief above that. Starting several years ahead leaves time to reduce the business’s reliance on you.

We also provide a full range of legal services, so our team of specialists can help with Wills, lasting powers of attorney, probate and trusts. Click here to explore our full range of legal services.

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Get in touch to speak with our retirement specialists

If you are looking to retire, or want to plan for retirement particularly in terms of your wider financial needs, please contact us today.

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