Helping a client turn savings into certainty
Many people focus on building their pension savings, but deciding how to turn those savings into a reliable retirement income can feel just as daunting. Here, Financial Planning Director Mark Lowden explains how he helped one recently retired client convert a £2.27 million pension into a guaranteed income, giving her greater confidence and peace of mind for the years ahead.
One of the most rewarding aspects of being a financial adviser is supporting clients through major life transitions. While building retirement savings is important, the point at which those savings need to start providing an income can often feel like a much bigger step.
I recently worked with a client who came to me as she approached the end of her career as a solicitor. Like many people, she had built up pension savings across several different schemes over the years and wanted to simplify her finances before retirement.
When we first met in 2023, she had six or seven separate pension plans and was looking for help consolidating them into a single arrangement that would be easier to manage. Following a review of her existing pensions and objectives, we consolidated her plans into one pension, with a combined value of around £1.6 million.
Facing the retirement income challenge
At the end of 2025, she decided to retire at age 60 and got back in touch to discuss what would come next.
Although she had built up substantial pension savings, she shared something many new retirees experience: concern about losing the reassurance of a regular monthly salary.
After years of receiving a consistent income from employment, the move into retirement can create uncertainty. Questions such as "How much can I afford to spend?", "Will my money last?" and "What's the best way to set everything up?" are incredibly common.
Over a series of conversations, we explored her goals, priorities and attitude towards risk. One theme emerged very clearly. More than anything else, she wanted the security of a steady income she could rely on throughout retirement.
Finding the right solution
During the time between consolidating her pensions and retiring, her pension had performed strongly. Naturally, she was delighted with this outcome. However, as retirement approached, our focus shifted from growing her pension to helping her use it in a way that aligned with her objectives.
Through our discussions, it became clear that an annuity would be well suited to her needs. She valued certainty over flexibility and wanted confidence that her essential spending needs would be covered by a reliable income.
What is an annuity?
An annuity is a product offered by an insurance company that turns your pension savings into a regular income. In return for a lump sum from your pension pot, the insurer pays you an income for a set period or for the rest of your life.
We explored a range of options before settling on a solution that reflected her priorities. She wanted her income to increase in line with inflation and also wished to protect her family through a lengthy guarantee period, as she still has young dependants.
The proposed arrangement would provide a tax-free cash lump sum of £268,275, with the remainder of the pension fund being used to purchase an annuity. Based on the quotations available at the time, this was expected to deliver an initial guaranteed income of between £85,000 and £90,000 a year, increasing with RPI (Retail Prices Index) and backed by a guarantee period.
Creating peace of mind
A key part of the advice process involved preparing for the annuity purchase.
To help protect the value of her pension from short-term market fluctuations, we moved part of the portfolio into lower-risk investments that were better aligned to her plans for taking retirement income.
This helped preserve more than £600,000 of investment growth achieved since the pension was consolidated.
We also discussed the benefits and risks of an annuity. While it can provide a guaranteed income for life, the income available depends on annuity rates at the time of purchase and, in most cases, the arrangement cannot be changed once it is in place.
While the financial outcome was important, the emotional impact was equally significant. Throughout our conversations, she spoke about the uncertainty she felt after stopping work and the challenge of adjusting to life without a monthly salary.
As our plans came together and the recommended solution became clearer, her confidence grew. By the time we reached agreement in principle, she told me she felt relieved to have a clear path forward.
In fact, she was so keen to move ahead that she asked to bring our presentation meeting forward so the arrangements could progress as quickly as possible.
The value of retirement income planning
This case highlights an important point: retirement planning doesn't stop when you retire.
Many people spend decades focusing on building their pension savings, but deciding how to turn those savings into a reliable income can be just as important. The right solution will vary from person to person. Some may value flexibility and ongoing investment, while others may prioritise certainty and guarantees.
For this client, knowing that she has a reliable income designed around her needs has helped transform retirement from a source of concern into something she can look forward to with greater confidence and peace of mind.
Important information
This article is for information purposes only. It is not intended as financial advice.
The scenario discussed is an example and what is right for each person will depend on individual circumstances.
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