Wealth Check: 'How should I plan for retirement?'

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The Independent Online

Andrew Crowe moved from Brighton to London almost three years ago. He has just started his second job since moving, as a net developer for a mortgage company. He is currently living in a one-bedroom rented flat. He would like some advice on saving up for retirement and also the possibility of buying his own property.

Our panel of independent financial advisers – Jason Witcombe from Evolve Financial Planning, Keith Churchouse of Churchouse Financial Planning Limited and Raj Shah from Simpli Independent Ltd – provide their recommendations for Andrew.

Case notes:

Andrew Crowe, 25, London

Salary: £46,000

Mortgage: None

Monthly spending: £2,350

Debt: £3, 000

Pension: None


All the advisers are concerned that Andrew doesn't have any protection in place to cover him if he is unable to work due to illness or disability.

Witcombe and Churchouse say he should check whether his employer offers him any cover for such eventualities, such as death in service, private medical insurance or income protection. If they don't, he could look at additional income protection insurance to protect a percentage of his salary if he is ever unable to work.

Shah suggests Andrew considers critical illness cover, and adds that it may be cost-effective to have it integrated into a life-insurance policy.

All three advisers also suggest building up an emergency fund equivalent to between three and six months' salary.


Andrew has a credit card debt of £2,000, and a loan of £1,000, which is due to be paid off in March. He is currently paying £340 per month in debt repayments, but in March he should be free of this. This surplus can then be used to pay off his credit card.

Shah suggests that once the debts are paid off, he should consider saving for large purchases in future, rather than using his credit cards.


Andrew has had an ISA account, which he used to save for his expenses over Christmas and between jobs. But Churchouse points out that he has not used his full ISA allowance this year, so should start making regular savings into the account immediately. To fit within his budget, this could be at a starting level of around £165 per month.

Witcombe is also keen for Andrew to use his ISA to its full potential as he thinks that it would be a good way of building up a deposit on a house. He recommends Landsbanki, which has recently introduced a cash ISA product paying a high level of interest.

Churchouse says that after deductions for living expenses, Andrew should be left with around £428 a month to save towards his future.


Churchouse says that Andrew should think about starting a pension as, on his current salary, he will qualify for higher-rate tax relief of 40 per cent. He will receive 22 per cent relief at source via his pension provider and then will be entitled to reclaim a further 18 per cent tax relief via his annual tax return.

Both Churchouse and Shah suggest that Andrew should check whether his new employer offers a pension scheme.

If they don't, Churchouse says Andrew should consider starting a stakeholder pension. He should also check his state pension forecast using a BR19 form (available on the Pension Service website, www.pensionservice.gov.uk), to see what he is likely to get from the state in retirement.

Witcombe says the problem with pensions is they won't help you to put down a deposit on a house, so it is important for Andrew to weigh up what is more important to him – a home now or a comfortable retirement. The earlier he starts saving for his retirement, the less money he will need to put away each month to secure a good pension.

To find an independent financial adviser in your area, visit www.unbiased.co.uk

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