Retirement planning portfolio

kendricks1

HI, I’ve recently started looking into making my money work a little better and more tax efficient.
I plan on retiring in 12 months time,im looking at options with very low risk.
I hold a large amount of cash in one year bonds,and have a modest nhs pension and an average private pension.
Has anyone got any basic ideas to spread the capital from the saving bonds and lump sums from both pensions in a tax efficient manner,I’ve looked into using a independent financial advisor but question the costing,thanks kindly any ideas would be appreciated.

MeteredOut

Not sure anyone will help unless you specify what "large amount of cash" and "average private pension" are. They could mean very different things to different people.

Have you looked into using one of the spreadsheets others have referred too on posts on this board?

ali_bear

Are those bonds held in a general investment account? If so would move the money into an ISA of some sort, as and when the bonds mature. 

Premium bond prizes are tax-free, you can hold up to 50k in those. 

You could look at maximizing your private pension contributions before retirement. 

Linton

It is impossible to give appropriate suggestions beyond generalities  until we have some idea of
1) How much income you will need in retirement
2) what guaranteed income you will have - DB pensions and SP
3) Therefore what income you will need from your DC pensions, savings etc.
4) How much you will have in your DC pensions, savings etc,

The danger with "very low risk" is that you dont get the returns you will need to ensure your income rises with inflation and lasts until death, or beyond if you want to leave an inheritance..  There is no benefit in paying very low taxes on inadequate very low returns.

On the other hand if almost all required your income is from guaranteed sources then it doesnt matter very much what you do.

kendricks1

Hi,thanks for the response,
1) approximately 25k per year in retirement 
2) DB of 5K a year plus a lump sun of 35K,
3) private pension of 160K 
4) one year bonds  adding up to 500K

The inheritance is already set up with property and gold,thanks 

Albermarle

In very approx terms .
You have £5K DB pension, but need £25K pa.
You have £695K in assets, so you should be able to generate about this much safely from that even if you live to be very old. 
However on the negative side the very large cash element would be a worry to really safely sustain the money.
On the other side you will have the state pension at some point.

If you have this and property and gold, the I guess IHT could be an issue.

af1963

State pension entitlement ?  And how long till you get it ? If you have a full state pension of around £11K plus the £5K DB, that leaves £9K to fund from your other sources after SP starts which should mean that even if you prefer lower risk you should still be able to generate that via bonds or annuities.  ( e.g if you're 60 it would cost about £200K to buy an index linked annuity for £9K.)  EDIT - you'd actually need a bit more to cover the tax due on the extra income if you buy an annuity.  If you live directly off your bonds/investments, you'll not pay income tax on that.

As for tax efficient: shelter as much as possible in ISA and DC pension ( you probably have time to contribute to these this tax year if you crack on, and then pay in again during next tax year.). ISA up to £20K per year, DC pension up to your earned income each year (or up to £60K plus any available carryforward allowance, if that's less than your earnings.)

kendricks1

Thanks for the response,I’m 57 but if possible trying to leave next year and hopefully my assets last at least till the state pension kicks in,thanks again