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This article is for general guidance only and is not financial or professional advice. Any links are for your own information, and do not constitute any form of recommendation by Saga. You should not solely rely on this information to make any decisions, and consider seeking independent professional advice. All figures and information in this article are correct at the time of publishing, but laws, entitlements, tax treatments and allowances may change in the future.
With extra time and less dependents on your hands, reaching your 60s and 70s can bring all sorts of greater freedoms.
It’s also a period when you’ll face some of the biggest financial decisions you’ll ever need to make. From how best to organise your pension arrangements, to preparing family and loved ones for the future, and a time when you’ll no longer be around.
The choices you make at this stage of your life can have a lasting impact. So, we asked professional advisers to share what they believe to be the best financial decisions that people in their 60s and 70s can make. Here’s what they said.
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For 60- and 70-somethings who can afford to do so, giving away some of your wealth could allow you to see family and loved ones benefit from a cash injection at a time when it’s needed the most.
Shaz Bishop, director at wealth manager RBC Brewin Dolphin, says: “In practical terms, this might mean helping a child onto the property ladder or supporting a growing family with day-to-day costs. Clients often tell us how much more meaningful it feels to see that support making a difference in real time.”
As well as helping your loved ones, lifetime gifting can reduce the value of your estate for inheritance tax purposes.
Gifting is the process of voluntarily transferring money to another person without expecting anything in return. But it comes with strict, time-dependent rules which, if flouted, can result in a financial penalty.
Gifting can be particularly important given more families are expected to face an inheritance tax bill due to frozen inheritance tax thresholds and unused pension pots counting towards the value of an estate from April 2027.
The annual exemption means everyone can give away up to £3,000 per tax year without it forming part of their estate for inheritance tax purposes. You can also make smaller gifts of up to £250 per person per tax year, provided the beneficiary hasn’t received part of your £3,000 annual exemption. Larger gifts may also fall outside your estate if you survive for seven years after making them.
However, it’s important to make sure your own financial future is secure before giving away large sums. You’ll need to be certain that you have enough income and savings to fund the retirement you want, as well as any unexpected expenses that might crop up.
Seeking financial advice now can help you assess how much you can afford to give away without compromising your later life plans.
Many people start taking an income from their pension as soon as they retire, but this isn’t necessarily the best option. If you have other sources of income, it can pay to leave your pension invested for longer.
Shaz Bishop says she regularly works with clients who choose to delay drawing an income from their pension. “This often means drawing on ISAs, cash savings or other assets to cover living costs in the short term, while leaving the pension to continue growing.
“Many clients who have taken this approach have found that even a few extra years can make a meaningful difference to their long-term retirement income,” she explains.
Delaying your pension withdrawals can also help you manage your tax bill. By avoiding taking taxable pension income before you need it, you may be able to stay in a lower income tax band for longer.
Joe David, CEO of accountancy firm Nephos Group, says: “I’ve worked with clients who retired at 65, lived on ISA savings and rental income until 70, then started drawing their pension, by which point it had grown substantially and they were drawing it at a lower marginal tax rate because they’d sold the rental property and dropped a bracket.”
This approach won’t suit everyone. For a start, you’ll need to be sure you have enough accessible savings to support your retirement until you decide to draw from your pension.
Also keep in mind that leaving your pension fund invested comes with risk. Investments can go up or down and you could end up with less income than you’ve planned for.
Whether your home is still right for you is an important question to ask yourself at this stage in your life.
Laura Ripley, chartered financial planner at BRI Wealth Management, says: “For many people, their property represents their largest single asset. Children may have left home decades earlier, leaving large family houses that are expensive to maintain, heat and insure.
“It is worth asking whether the family home is still helping achieve retirement goals or becoming increasingly burdensome. Releasing capital from property can create opportunities to improve retirement income, fund lifetime gifting strategies and pay for future care requirements.”
However, downsizing won’t be the right answer for everyone. For some, relocating or even buying a larger home might better suit the lifestyle they want in retirement.
Alexandra Loydon, group advice director at St. James’s Place, says one couple the firm advised sold their home in South London and moved to Suffolk, buying a larger property with more outdoor space.
She says: “This was a deliberate financial decision based on what mattered most to them. They wanted to create a family hub where their children and grandchildren, who were still based in London, could come together for Christmas, summer holidays and family events.
“Good financial planning in your 60s and 70s is about understanding what is affordable, but also making sure money is being used in a way that supports the life people actually want.”
Talking about money and inheritance can feel a little uncomfortable, but having open conversations with your family now can help avoid misunderstandings later. Understandably, parents want what’s best for their adult children and this may mean lending a hand financially – ideally, without leading to arguments.
Charlotte Ransom, chief executive of wealth manager Netwealth, says: “As people move into later life, we have seen that it’s well worth talking openly with family about your intentions.
“These conversations are an opportunity to explain the thinking behind your decisions, share your family’s values and help younger generations understand both the privilege and responsibility that comes with wealth.”
Whether you’re planning to give away money during your lifetime, leave a larger inheritance to one sibling than the other, or support a charity, explaining your reasoning while you’re still around can make these decisions easier for everyone involved.
Financial planning doesn’t only have to focus on making the most of your own money, it can also be about helping those you’ll leave behind.
One of the most valuable things you can do in your 60s and 70s is make it easier for your executors to deal with your estate. This means preparing a list of bank accounts, investments, pensions, insurance policies and other assets.
It’s also essential to keep accurate records of gifts, particularly if you’re making use of inheritance tax exemptions, and let your executors know where these documents, along with your will, are stored.
Jo Summers, head of private wealth & tax at law firm, Jurit, says: “Making sure your executors know where important documents are kept and introducing your family to your professional advisers may not feel like major financial decisions, but they can be some of the most thoughtful and valuable things you do for the next generation.”
On the other hand, failing to do this can cause significant stress, delays, and unnecessary costs for those dealing with your estate.
Summers explains: “In one case, a family had to search not only across the UK but internationally to establish what assets the relative had. It added significant complexity, delayed the administration of the estate and ultimately resulted in significantly more professional fees, as we searched the world over for the valuable estate.”
