UK retirement planning tools

gadgetgeezer10

Hi,

I'm looking for a DIY retirement planning and drawdown tool that can make suggestions, especially around tax. There are lots of options in the US, but in the UK I can only find a product from Retireeasy.co.uk. 
Does anyone have experience with this tool, or know of UK alternatives?


Thanks,

NedS

There are plenty of tools that will allow you to model accumulation and drawdown, but I'm not sure any should be making specific suggestions around tax. These tools are simply models and are best used to illustrate if a given set of inputs will give a desirable outcome, or not. I have used timeline and, for example, it allows BRT, HRT bands to be set and will show the amount of income tax that would be paid in any given year based upon current tax rates and input data. It makes no suggestions though.

What tax(es) specifically are you concerned with - Income tax, Inheritance tax, LTA, CGT, dividend tax? I feel a lot more information about your specific circumstances would be required to provide a more meaningful answer.

kinger101

Also worth bearing in mind that tax rules change quite frequently.  There's a risk in using a defunct tool that then gives misleading information.  The best think you can do is keep up-to-date with the legislation - this forum is really useful here.

There's a quote I like by a guy called George Box:

All models are wrong but some are useful.  

Worth bearing in mind for any tool you use.  Even the best ones will only tell you whether your plans have a reasonable chance of succeeding.  You need to be flexible when real-world data overides the assumptions used in the model.

Pat38493

I have tried the following tools

- Timeline (for professionals but you can get a trial account where you are only allowed 3 separate clients for free).  Models your plan against historic or monte carlo data and calculates UK tax.  Will suggest a cash flow plan based on your prioritisation of different asset accounts. 
- Cfiresim - historic modelling of basic scenarios online - useful for rough stress testing.
- ERN website has a spreadsheet that calculates various potential safe withdrawal rates based on market conditions.
- Spreadsheet from Boggleheads that recommends a withdrawal amount per period based on current valuations using VPW (Variable percentage withdrawal).
- Retireeasy as mentioned above (monte carlo modelling).
- Voyant finance - this seems to be a highly advanced tool for lifetime financial planning used by professionals - you can get a 28 day trial to validate your retirement plan with it.  After that it's not viable to individual pensioners as it costs about £150 per month or suchlike.

The one I've found most useful is Timeline, although it does not have the ability to model asset changes like property purchase or downsize directly - you have to manually calculate the amount of equity you want to free up and key that in as an future cash account.  

Timeline does not allow you to control how and whether you take tax free cash from pension pots - it basically seems to assume UFPLS.

Retireeasy does allow you to do that, but it's a bit unintuitive because you have to specify a % withdrawal from pension pots per year, and it then keeps a "secret" account of any supluses and applies the same growth rates to those as to your pots - the results are probably ok as long as you make sure your non current spending is invested.

However as mentioned by NedS none of these tools will actually tell you specifically when to crystallize your pension or suchlike, but some of them will recommend withdrawals based on the priority order specified (usually using cash and taxable assets first as the default).  Timeline and Voyant will also calculate LTA tax although I am a bit dubious about whether Timeline fully does it correct as they don't make it visible in the cash flow data.  

Voyant seems to be the cleverest tool I've seen, but even Voyant is not clever enough to recommend pulling your personal allowance out of your pension pots if you have no other income in a given year from what I saw in my testing.  You have to tell it to do that specifically in those years where that scenario occurs.

Once you have a basic strategy in place, you may be better off creating your own customized spreadsheet.

Albermarle

However as mentioned by NedS none of these tools will actually tell you specifically when to crystallize your pension or suchlike

So in the end you either have to get informed about all the pension and tax rules/strategies yourself ( by reading this forum maybe ) or pay a professional to do it for you,
Then when global events, changes of governments, changes of pension and tax rules, unexpected trends in economies/financial markets, inevitably happen, you have to maybe start again.......

bluenose1

I use guiide.co.uk and it says it works out the tax efficiently when withdrawing.

I use it in conjunction with my excel spreadsheet and have found it really helpful for comparing different strategies eg when to start using my DB pension etc.
Very easy to use.

Roger175

bluenose1 said:

I use guiide.co.uk and it says it works out the tax efficiently when withdrawing.

I use it in conjunction with my excel spreadsheet and have found it really helpful for comparing different strategies eg when to start using my DB pension etc.
Very easy to use.

I also like guiide.co.uk, but I have a feeling it only works if you are already 55, furthermore, it's a shame you can't use it for a couple. 

Fphelp123

Roger175 said:

bluenose1 said:

I use guiide.co.uk and it says it works out the tax efficiently when withdrawing.

I use it in conjunction with my excel spreadsheet and have found it really helpful for comparing different strategies eg when to start using my DB pension etc.
Very easy to use.

I also like guiide.co.uk, but I have a feeling it only works if you are already 55, furthermore, it's a shame you can't use it for a couple. 

I use guiide after someone on here recommended it. It is basic but works pretty well in terms of doing different saving and pension scenarios. I am 40 and it works well for my planning or at least to keep me on track with my saving. 

I still have no idea how much I will need to retire as my spending has been so up and down for the past few years particularly during lockdowns but that’s a big calculation  for another day

LateGenXer

Great overview, Pat38493.

I too found Guiide's concept of efficient tax drawdown interesting, but got frustrated with the limitation of not modelling couples, and no LTA modelling.  It also didn't answer questions such as when is the best time to withdraw the TFC and how to apply it to reduce income tax later on.

I ended writing my own calculator, first for my own purposes, but eventually decided to make it more generic and useful for others.  FWIW I've made it available on lategenxer-rtp.streamlit.app .

older_and_no_wiser

LateGenXer said:

I ended writing my own calculator, first for my own purposes, but eventually decided to make it more generic and useful for others.  FWIW I've made it available on lategenxer-rtp.streamlit.app .

Oooh. This looks really interesting! I've just been having a play and am very impressed.

I'm wondering if it's possible to build in some capability of allowing for ad-hoc lump sum withdrawals in the initial retirement years? e.g. to buy that motorhome or new Tesla to celebrate not working ever again. It would be great to see how the tool recommends managing the withdrawal and tax efficiency strategy for that. 

LateGenXer

older_and_no_wiser said:

I'm wondering if it's possible to build in some capability of allowing for ad-hoc lump sum withdrawals in the initial retirement years? e.g. to buy that motorhome or new Tesla to celebrate not working ever again. It would be great to see how the tool recommends managing the withdrawal and tax efficiency strategy for that. 

I'm glad you found the tool useful.  That's a fair request.  There could also be a mortgage to pay off, for example.  I can't give a timeline, but I'll add it to the to-do list.