Profit from being an at retirement prophet

Paul HarrisonVince Smith-HughesPrudential

Retirement Planning Specialist Segmentation – Client Needs

> 10 years to Retirement

< 18 Months to Retirement

At Retirement

In Retirement

Client choice? Advisor options?

Retirement Market Opportunity

Source ONS Annual Mid-year PopulationEstimates for England and Wales, Mid 2011

Source ONS Health Expectancies at birth andat age 65 in the United Kingdom, 2008–2010

UK retirement income market – Rolling Year Q2’11- Q2’12

Source - ABI Q2 2012 *Includes SIPP Drawdown

High

Low

PensionerInvestment

Risk

Low Pensioner Longevity Risk High

Annuities with shared Risks £0.9bn (5.4%)

Flexible Annuities

Variable Annuities

Middle Market

With-Profits

Fixed Term

Guaranteed Lifetime Annuities

£14.1 bn (80.7%)

HIGH CAPITAL

Income Drawdown*£2.4bn (13.7%)

LOW CAPITAL

Guaranteed Lifetime Annuity: Annuities (C,UL,PLA)

Annuities with Shared Risk: With profits Annuities

Income DD: Income DD incl. SIPP for DD

Maximising the benefit of planningPre-Retirement At Retirement

Reducing penal tax rates, - 40%, 50% child benefit clawback, personal allowance etc

Spread investment income to make useof personal allowances

Use of carry forward to maximise relief Consider risk on all levels

Salary Sacrifice Beware of negative pound cost averaging

Gain 50% tax relief not 45%Mix and matching of solutions can often be desirable

‘Aim’ for £21,000 tax free income Consider phasing in and out of drawdown

NI RecordDrawdown is ‘lower risk’ than at most other times

Warm up lettersThird party pension contributions for IHT effectiveness

What’s your Proposition?Pre Retirement – At Retirement – Post Retirement

Call to action?

Retirement proposition?

Maximise tax relief in run up to retirement

Bespoke your at retirement advice