“I am retiring in seven years with £320k saved – how can I make it last?”

Our CEO Charlotte Ransom answers a weekly question for readers of the i paper – helping them to better understand their investments and how to effectively plan their finances to achieve their long-term goals. Many of these questions are also highly relevant for Netwealth readers.

Question: As I am facing retirement in around seven years I feel I should take some financial advice to maximise my £320,000 pot in retirement. How can I make the most of this and make it last as long as possible?


Answer: There are certain situations where we would definitely recommend people seek professional advice. Retirement is a great example – it is a key time to plan for and an expert’s understanding of an often-complex life stage could be highly valuable.


As a general rule, we suggest seeking advice if your circumstances have or are due to change. This might be, for example, when you are first establishing a financial plan, if you get divorced or when you want to assess the pots accumulated over time and their potential to see you through your retirement years.


In your case, financial advice could be useful in many ways. You still have seven years before retirement and may like to discuss how best to maximise appropriately the £320,000 you have already accrued or explore the best way to access tax-free savings over the next few years – for example, assessing how much to contribute towards pension and ISA savings if you are not already doing so. An adviser can also be helpful in evaluating how much you can afford to put away for the future, while maintaining your standard of living now.


They will naturally encourage you to make the most of your tax-free allowances (and, if relevant, those of a partner) and they can also help ensure you are invested wisely. For example, you may need to reassess how you are invested and the ratios of different investments you hold (such as stocks and bonds). Bear in mind that investment growth remains a crucial factor because while it is only seven years before you retire, you will probably then have twenty to thirty years of retirement ahead of you once you have left the workforce.


Preserving your wealth is important but shouldn’t mean you put to one side the essential catalysts to boost your wealth – particularly until you are a long way further down the retirement road and entering much later age. This is where nuance comes into play; helping you find the right balance, at the right price, should be a prerequisite of any trusted adviser.


As well as growing your retirement pot, and giving you the means to sustain it for longer, an adviser can also help you work through other considerations – for example, how best to organise your assets if you wish to leave money for the next generation. They can advise on the ins and outs of inheritance tax and gifting and do that in the context of your overall wealth, helping to assess what is sensible in the context of your own needs over time.


A thorough financial planning exercise can be highly beneficial – finding the most appropriate path for all your money is time-consuming and potentially tricky to navigate, even for those familiar with how investments work. Additionally, while you haven’t indicated whether you own a property or other investment assets or savings, an adviser will also typically look at your complete financial situation, providing a foundation to help you make the most of your wealth, both for yourself and loved ones. Their experience is also likely to steer you away from the common retirement mistakes that we see so often.


While we are on the topic of advice, it’s important to know that it can come in various shapes. For example, you can have one-off advice to address a specific concern, or there are also advice packages that are designed to help with common questions such as pension contributions. We should also quickly examine the two main advice types available in the UK – restricted and independent advice.


Independent financial advice is provided by financial advisers who have no restrictions or ties to specific providers or products. They can recommend products from the whole UK market, in theory, giving access to the broadest possible range of financial investments across providers. In reality, no one is capable of reviewing every single choice in the market, and we often see portfolios designed by independent advisers that share very high commonalities, suggesting that their due diligence has led them to a select number of funds which become their preferred choices.


As a result, if you choose to talk to an independent adviser, I would suggest asking for a review of their historical portfolio mix and gain an understanding of how it has changed over time and across their clients. This will give you a sense for their approach and the types of choices they have made.


Restricted financial advice is when advisers are limited to a discreet set of investments that they can recommend and this is increasingly common in the UK. Restricted advisers are limited in terms of their investment recommendations but are nevertheless still able to advise a client across all their assets and should have the specialist investment and retirement expertise you need to help you make the most of your money.


Costs may also be lower given a more streamlined range of investment suggestions; however, costs can vary significantly from one group to another and should always be properly understood before entering into any sort of financial advice relationship.


You should go with whatever approach makes the most sense for you and your needs. The cost of good financial planning advice has been shown – by the International Longevity Centre and others – to be more than outweighed by the value of the long-term benefits. Speaking with a qualified adviser will likely give you more confidence when you start retirement in seven years, will remove the pressure of making big decisions on your own, and should help make your retirement pot last as long as possible.




This article was published in the i on 9 August, 2023.


Please note, the value of your investments can go down as well as up.


Netwealth offers advice restricted to our services and does not provide independent advice across the market. We do not offer advice in relation to tax compliance, personal recommendations with regards to insurance and protection, or advise upon the transfer of defined benefit pensions. When investing, your capital is at risk.


The answer here does not represent financial advice, nor should it be interpreted as a recommendation to invest.

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