Retiring early and resolving a tax issue – Don’s story

I was introduced to AAB Wealth by my son’s partner, Claire. She’d recently started working at the company herself as an accountant and had so many positive things to say about her new job.

I already had a shortlist of potential financial planning firms to choose from, but I admired AAB Wealth’s commitment to moving forward as a business, and training new entrants into the sector.

The team also stood out because of how easy it was to communicate with them. I wanted a personal touch and face-to-face interaction. When making big life-changing decisions, I want to shake hands with someone, sit down with a coffee and a biscuit and have a proper conversation!

Retiring earlier (and richer!)

Before retirement I worked for a large oil company and had built up a substantial pension fund. The company I worked for followed all the correct processes, providing seminars and advice to help those entering retirement. But I still wasn’t sure whether to take my pension as a monthly payment or cash it in and draw a lump sum. I also wanted to know if I could retire early, so I turned to AAB for advice.

I told Martyn at AAB Wealth about my plan to retire at 57, he talked through my options and showed that I could absolutely afford to retire then. He discussed the rules around Lifetime Allowance (LTA) in detail with me. The LTA is the maximum amount you can save into a pension without needing to pay additional tax. He explained that by taking my pension benefits in a more flexible way I could avoid any potential tax charges. The subsequent announcement by the government to scrap the Lifetime Allowance from the 2024/25 tax year has only gone to benefit me further and leave me with more money in my pension.

Making the most of retirement

Working with AAB Wealth has helped me overcome the uncertainty that came with retiring early – not just from a financial point of view, but emotional too. As an operational manager, I spent my career solving problems. I worried I’d get bored in retirement and that it’d be a struggle to keep myself busy, but I’m so glad that AAB encouraged me to retire sooner.

I sat down and wrote a list of 20 things I wanted to do in the first year of retirement that I realised just how much freedom I’d have once I stopped working.

I play golf regularly, ride my motorbike often, and have been on 22 holidays already! I’ve also been able to help my sons decorate their homes. I’ve become the go-to person whenever a cooker or washing machine needs fixing. It’s taking longer than I thought to tick things off the list!

A huge relief

Managing my retirement wasn’t the only financial matter I needed AAB Wealth’s help with. I was also concerned about taxes, after becoming aware of some discrepancies in the historical declarations and payments I’d made to HMRC regarding shared dividends. I wanted to be above board and do the right thing, but I was out of my depth and didn’t know how to.

My worries were quickly laid to rest when Martyn introduced me to Lynn and the Private Clients team within AAB, who reassured me that they were familiar with the issue, the problem was fixable, and I didn’t need to worry about being hit by a large tax bill.

They helped me make sense of all the paperwork and complexities. After paying a modest bill (which was far less than I originally expected), I was able to draw a line under the sand when it came to the HMRC issues. It was a huge relief.

I know people who’ve tried to resolve this type of problem themselves, often going down multiple rabbit holes and having to repeatedly correct past mistakes. Some of my former colleagues had received fines for a similar issue, but AAB helped me settle the outstanding payments without incurring any penalties. Thanks to them, we only had to do it once and we got it right the first time.

Experts in their field

If you’re an expert in your field (I have a background in engineering), you may have spent your career building knowledge and expertise in your particular sector, only to perhaps find yourself thrust into an unfamiliar industry when you retire.

For me, that industry was finance. I’d been spoon-fed at work, guided through financial matters by my employer. But once I reached retirement, I was on my own, and needed help making decisions with confidence.

AAB Wealth helped me do just that and over the last few years I’ve passed their details onto so many people. They have a team of experienced advisers covering financial advice to accounting and tax. They’re easy to communicate with and quick to answer a phone call or call me straight back.

So if you find yourself in a similar situation to me, whether you’re wondering how to manage your pension or be as tax-efficient as possible, I would strongly endorse the team to resolve the issue and set your mind at rest.

Get in touch with us today to start planning your early retirement.