The Telegraph Money Makeover: ‘I want to retire in eight years – ISA or pension?’

It’s the million-dollar question for anyone entering the latter stages of their career: how can you make your savings work as hard (and as tax-efficiently) as possible to ensure your retirement is a comfortable one?

For Annette and Andre Freeman, 57 and 58, this question could make the difference between being able to retire early or not. “We’d like to stop working before we turn 65, but we’re not sure if we’re on track,” said Mrs Freeman, who works for a large food company.

Jamie Smith, financial adviser at Foster Denovo, comments on Mr and Mrs Freeman’s retirement plans after looking at their current financial position and their plans. “It’s great that Mrs and Mr Freeman have identified surplus income they can save towards retirement. They also appear to have some “lazy money” earning little interest that they could put to better use.

As a starting point they should determine the level of income they need in order to maintain their desired lifestyle in retirement. From there, they can create a financial plan to help them achieve their goal of retiring within seven or eight years.

They should understand how much secure income they are entitled to from their final-salary and state pensions, and then work out how much they might need to drawdown from their other savings and pensions to meet any income shortfall.”

Read the full article on The Telegraph’s Money Makeover here.