Now 56, Pat Davison had her heart set on retiring early but is aware she may have to put her dream on hold.
"I really wanted to retire at 60 but this is looking uncertain and I think I'll probably have to work on to 62," she says. "I've been divorced for 15 years, so whatever happens is down to me."
To start with, she pays 8 per cent of her salary - £178 a month - into a company pension scheme with Norwich Union, to which her employer adds 3 per cent of her salary.
She also has money invested in a Standard Life private pension, two Legal & General (L&G) plans (including a pot for additional voluntary contributions) and a final salary scheme run by AstraZeneca, the pharmaceuticals company where she worked before joining her current employer.
A previous financial adviser told Pat these payouts should add up to more than £11,000 a year when she reaches the age of 65. But she is not sure how accurate these projections are.
Pat transfers £150 a month into a Royal Bank of Scotland (RBS) deposit account; she now has £2,500 with RBS, earning 1.55 per cent interest. She has been planning to open a mini cash individual savings account (ISA) for some time but hasn't yet got round to it. She also has £100 in premium bonds.
Her other investments, which date back to 2000, have yet to bear fruit, she says. A £2,000 lump sum invested in a Jupiter "cautious managed" equity ISA is currently worth about £1,600, while £3,000 invested in a Friends Provident with-profits bond had a £2,625.31 encashment value in February.
Pat is unimpressed: "Neither investment has performed very well - and I'm not sure whether to keep them."
She remortgaged her £155,000 home with Skipton building society in April and now has a £58,000 repayment mortgage set at a fixed rate of 4.99 per cent for the next three years. Her basic repayments come to £610 a month, but she has just started to overpay by £150 a month.
Pat's employer provides death-in-service benefits as well as Bupa private health cover.
Although it's not something she wants to consider, Pat stands to benefit from a likely £60,000 inheritance after the death of her mother, who is 96 this year.
She also has two adult sons, one of whom will probably move to Australia. If this happens, she will want to visit frequently, so a fund for travel expenses will be an essential part of her financial planning.
Interview by Sam Dunn
Pat Davison, 56, from Manchester Job: human resources manager Income: £34,500 Savings: £2,500 in a bank account Investments: £2,000 invested in an equity ISA; £3,000 in a with-profits bond; £100 in premium bonds Goal: to unpick tangled pension and retire as soon as possible
The forecast painted a rosy picture, but nurture that pension and it will bear fruit
Her mixed bag of company pensions might give Pat only £6,000 a year instead of £11,000, warns Ben Yearsley of independent financial adviser (IFA) Hargreaves Lansdown. However, Mr Yearsley believes she has two strong retirement savings schemes that are definitely worth keeping and one that is worth adding to.
Pat's savings and investments could work a lot harder, says Anna Bowes of IFA Chase de Vere. An immediate switch to a mini cash ISA is a must.
Her Jupiter equity ISA investment could do with a rejig too, says Vivienne Starkey of IFA Equal Partners.
Determining how much Pat can expect to receive when she retires is an imprecise science. For the most accurate figures, Ms Starkey advises that Pat write to each company with which she has a pension and "ask for an illustration of possible benefits at retirement age 60 and 62".
Pat should also get a forecast for her state pension by completing form BR19 on the internet at www.dwp.gov.uk, says Mr Yearsley. He believes the Norwich Union scheme offered by her current employer is a decent one, and she could consider paying another 12 per cent of her salary in each month.
She should retain the AstraZeneca plan as it is "a good final salary scheme", he adds. He thinks the Standard Life pension plan is worth holding on to, as it should offer Pat a windfall when the proposed demutualisation takes place. Ms Bowes says that she should check the type of fund in which the Standard Life money has been invested to make sure it's the best.
Despite the drawbacks of having L&G funds in light of the Financial Services Authority's determination to fine the insurer £1.1m for allegedly mis-selling endowments. Mr Yearsley suggests Pat stick with them for now. Any attempt to consolidate her pensions by moving funds elsewhere would attract high charges and "probably prove prohibitive".
Pat should switch the £2,500 from her RBS bank account into a mini cash ISA straight away, says Ms Bowes. "Abbey is offering an easy access ISA at a very competitive 5.35 per cent," she adds.
Higher rates than this are available, Ms Starkey says, but they include bonuses that are withdrawn after an introductory period.
All our IFAs lament Pat's decision to invest in her Jupiter equity ISA at the top of the market in 2000. However, both Ms Bowes and Mr Yearsley think that her fund should "have no problems over the longer term" and suggest she leave the money for now.
If Pat is particularly unhappy with the performance of the Jupiter equity ISA, Ms Starkey suggests a switch to the Jupiter Merlin Growth Portfolio fund to get "a diversified portfolio for a relatively small investment".
The Friends Provident with-profits bond will likely have penalties for anyone who wants to exit in the first five years, says Ms Bowes. "Pat should wait until its fifth anniversary before asking for another valuation statement and reviewing any decision to encash it."
Changes to pension rules due to take effect on 6 April 2006 will allow Pat to use her anticipated inheritance to boost her retirement income.
"At that time, she will be able to invest a lump sum amount up to [the value of] her current salary [each year] into a pension and receive tax relief," says Ms Bowes. The remainder of the inheritance could be invested according to how much risk Pat is prepared to take, Ms Bowes adds.
Mr Yearsley suggests she uses the inheritance to pay off her mortgage and invests the rest to provide an additional income in retirement, perhaps via equity income funds.
If Pat has a low-risk attitude, Ms Bowes suggests fixed income funds like the Allianz Dresdner High Income bond or SWIP High Income bond funds.
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