HANNAH’S STORY

For advisers onlyThis is for financial adviser use

only and shouldn’t be relied upon by any other person.

Hannah’s 52 and married with three children.She’s built up a large amount of savings

and would like to phase in her retirement.

Here’s how our financial planning toolhelped to create a financial plan

to meet her needs.

2

ABOUT HANNAH

• Hannah contracts in financial services as a Management Consultant and earns £117,000 a year. She doesn’t smoke and has a relatively healthy lifestyle, so she’d like to plan to age 92.

• She’d like to have a yearly retirement income of £60,000 but she’s prepared to reduce her income requirements if it means she could retire earlier.

• She’s built up savings worth £850,000 and she’ll continue to save 15% of her salary into her pension until she retires. She also has the following sources of income:• A small defined benefit pension which will give her a yearly income of

£2,000 from age 60.• A few rental properties which will give her a yearly income of £6,000. • A full State Pension when she reaches age 67.

It’s also important to Hannah that:

• She can use her tax-free cash to minimise the amount of income tax she’ll pay in retirement by using it to supplement any income above £50,000.

• She can spend more while she’s younger and less when she’s older.

• She can leave a charitable donation of £10,000.

• She has £100,000 left to share amongst her grandchildren.

• She has a financial plan in place to give her peace of mind about her retirement goals.

• Her investments benefit from regular reviews, hands-on supervision and ongoing fine-tuning.

The recommended solution

Based on Hannah’s needs, her financial adviser recommends that she takes out an Income Release plan with Royal London.

Hannah’s got an adventurous attitude to risk so her adviser has recommended that she invests in Royal London’s Governed Retirement Income Portfolio 5 (GRIP 5).

What investment growth is needed?

5.3%

This is the target growth rate needed

each year to help you meet your needs,

allowing for charges and inflation.

£110,000

Although it could be different in the future, you could use this to buy a secure income

of £4,700 a year from age 60 (based on an annuity rate of 4.7%) or pass it on to your loved ones when you

die.

£60,000

This is the yearly income you'll

start taking from age 61.

How much have you saved?

£850,000

You’ve saved £850,000 so far

and you don't plan to save any more.

Hannah Sample Financial plan

This plan is designed to help you achieve your financial goals. It's based on your current needs and circumstances and contains important information about your savings.

Age to plan to Current age

This financial plan covers the next 40 years.

5 June 2019

52 92

How much do you want to have left?

How much income do you plan to take out?

Hannah Sample financial plan 1234567

All the figures shown in this financial plan account for inflation.

Hannah’s financial plan

After discussing her current needs and circumstances, Hannah’s adviser uses our financial planning tool to create a financial plan that will give her a full picture of her different sources of income and how her spending needs could change over time.

Hannah will meet up with her adviser regularly to review her financial plan, to make sure it continues to meet her needs. In return for the services that she receives from her financial adviser, Hannah’s agreed that an ongoing adviser charge of 0.5% will be deducted from her plan.

3

HOW MUCH INCOME DOES HANNAH PLAN TO TAKE OUT?

The chart below shows Hannah’s sources of income and how the money she takes out could change over time.

All the the figures shown are in today’s money. To find out more about the assumptions our financial planning tool uses, visit our website at adviser.royallondon.com/fpt

4

HOW COULD HANNAH’S SAVINGS PERFORM?

The chart below shows how Hannah’s savings could perform in different market conditions, over the next 40 years.

Poor market

Hannah’s plan wouldn’t meet her needs.

Her savings could run out at age 85.

3 times out of 4, our financial planning tool expects markets to perform better than this.

Average market

Hannah could achieve her target income and have £190,300 of income left when she reaches age 92.

2 times out of 4, our financial planning tool expects markets to perform better than this.

Strong market

Hannah could achieve her target income and have £599,000 of income left when she reaches age 92.

1 time out of 4, our financial planning tool expects markets to perform better than this.

All the the figures shown are in today’s money. To find out more about the assumptions our financial planning tool uses, visit our website at adviser.royallondon.com/fpt

5

HOW ACHIEVABLE IS HANNAH’S FINANCIAL PLAN?

When investing in the stock market, there are never guarantees.

To assess the likelihood of Hannah achieving her financial plan, our financial planning tool uses a sophisticated economic forecast, provided by Moody’s Analytics.

This stress tests Hannah’s plan by looking at 1,000 different ways the economy could perform over the next 40 years.

58.6%Hannah’s forecast resultsWhile this isn’t guaranteed, it means that 586 times out of 1,000, our financial planning tool expects Hannah to achieve her financial plan – so her savings could provide the income she needs until age 92.

How could Hannah improve her forecast result?

Save more for her futureAlthough it depends on Hannah’s individual circumstances and may change, this means that for every 80p she saves into her pension, the taxman will make it up to £1.

Retire later Hannah might want to retire later or work part-time to help her savings last longer.

Take a lower incomeHannah might want to take a smaller income from her pension each year to help protect her income in later years.

Spread out her tax-free cashTaking her tax-free cash as a series of smaller payments could help Hannah to reduce the amount of tax she pays.

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WHY ROYAL LONDON?

Some of the reasons why Hannah’s adviser has recommended Royal London are set out below:

READY-MADE INVESTMENTS We have a wide range of investment options, which can take account of Hannah’s attitude to risk and plans for the future.

OUTSTANDING SERVICE We’ve won five stars for our service, so you can count us to deliver a great service when it matters.

CUSTOMER ENGAGEMENT We’ll help Hannah keep an eye on her savings and our regular updates will support her ongoing conversations with her adviser.

FLEXIBLE RETIREMENT OPTIONS Our personal pension lets Hannah take full advantage of the pension freedoms, meaning she can access her money in a way that suits her.

SHARE IN OUR PROFITS When we do well, we’ll aim to boost Hannah’s savings by adding a share of our profits to her plan each year – we call it ProfitShare.

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THE IMPORTANCE OF ONGOING REVIEWS

To make sure Hannah’s financial plan continues to meet her needs, she’ll meet her adviser regularly. As part of this, they’ll consider:

• Changes to Hannah’s financial goals or circumstances.• How Hannah’s savings have performed.• Changes in market conditions.• Changes in legislation. • Whether any new products have become available.• Whether flexible access is still a suitable product for her.

Hannah will receive a yearly statement from Royal London to show her the value of her plan and the investment growth she’s had. Hannah’s adviser can then use our client review service as part of their regular review process to start a deeper discussion.

BENEFITS OF OUR FINANCIAL PLANNING TOOL FOR YOU AND YOUR CLIENTS

• Client understanding Give your clients a full picture of their different sources of income and how their spending needs could change over time.

• Easy to use You only need to provide a few pieces of information to use the financial planning tool, you can save and compare several models and we’ll default some of the information for you, saving you time and effort.

• Professional client report You can create client reports to help you demonstrate the work you’ve done and the expertise you’re providing.

• Sophisticated economic model Our financial planning tool is powered by a sophisticated economic model, provided by Moody’s Analytics, who are known experts in this field.

• No extra charge We won’t charge you to use our tool, so you can provide a cost-effective planning service to your clients.

January 2020 L 2T PD 0007

Royal London1 Thistle Street, Edinburgh EH2 1DG

royallondon.com

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For more information about how we can support you and your client through the

retirement planning journey, speak to your usual Royal London contact or visit

adviser.royallondon.com/fpt