In a nutshell

Retirement planning for City professionals involves far more than pension projections. With multiple income streams, complex tax positions and valuable assets to consider, the opportunity to build a clear, flexible strategy is huge.

Start by defining the lifestyle you want, then work backwards to structure your finances around it. Get visibility on every income source, sequence withdrawals intelligently, and use the right wrappers to keep more of what you’ve built. Finally, build in flexibility for life’s inevitable shifts and plan for how your spending and legacy will evolve over time. Done well, this gives you decades of clarity, control and confidence.

We’ve also written about the human side of retirement – the emotional shifts and real stories that numbers can’t capture. Read that piece here to get the full picture.

The reality for city professionals

Retirement planning for City professionals isn’t just about pensions. When your finances span multiple income streams, property, carried interest, investments and complex tax positions, the stakes are higher-and so is the opportunity to get it right.

According to UK government research, only around 1 in 5 people start actively planning for retirement before their 50s, meaning the vast majority leave it until much later. Even among high earners, (those with over £250,000 in assets) underestimate how much they need for retirement by more than double, believing £663,000 will be sufficient when they actually need at least £1.5 million.

That gap between expectation and reality is avoidable – but only if you start early, with clarity about the life you actually want to live.

Conversations often start with professionals who’ve spent their careers optimising bonuses, pensions, and tax years – only to find that when they finally sit down to think about life after work, the spreadsheets can’t answer the most important questions.

This is where many London professionals find themselves: asset-rich, time-poor, facing a transition that spreadsheets alone can’t solve. A smart strategy isn’t just about tax efficiency. It’s about creating a structure that supports your lifestyle for decades to come.

Where people trip up with retirement planning

Even the most financially literate can fall into similar patterns:

• Treating retirement like a single date rather than a phased transition.
• Fixating on pensions while ignoring ISAs, taxable portfolios and property.
• Drawing income in the wrong order and triggering unnecessary tax.
• Underestimating how long retirement can last.
• Leaving legacy planning too late to make full use of allowances.
• Assuming lifestyle planning will “just happen.”

Most of these missteps aren’t down to carelessness – they happen because people rarely see their entire picture laid out clearly. Once they do, the decisions that follow are sharper and more deliberate.

Research from Standard Life found that one in five retirees wish they had planned for their retirement more thoroughly. For high earners with complex tax situations, that timing gap can be costly.

1. Start with life – then build the financial plan backwards

The best retirement strategies don’t start with spreadsheets. They start with a clear picture of how you want to live once work stops.

For additional-rate taxpayers in London, that’s often a bigger shift than expected. After decades of structuring decisions around bonus cycles, tax years and investment timelines, retirement requires a different lens: your lifestyle leads, the money follows.

Before any modelling begins, we explore questions like:

• What do you want your retirement lifestyle to look like – day to day, season to season, year to year?
• Will you step away sharply or phase it over time?
• Will London stay your base, or will you split your time elsewhere?
• How much structure do you want in your weeks once job titles disappear?
• How do you want to support children or grandchildren – and on what terms?
• What major experiences or changes are still on your list?

These questions aren’t ‘nice to have’- they change the strategy.

We’ve seen cases where senior banking executives initially planned to retire in one clean break. When lifestyle needs were mapped out, a three-day-per-week consulting phase over five years suited both their energy and financial goals better. This approach reduced strain on investment portfolios, lowered effective tax rates, and provided flexibility for family time while maintaining a sense of purpose – though individual outcomes vary based on circumstances. 

Once the vision is clear, the financial plan is built backwards: income flows, tax structures, investment allocations and withdrawal sequencing designed to support how you want to live, not just to minimise a tax bill.

For more on the emotional and identity shifts that come with this stage, this article digs deeper.

2. Know your numbers – Income, assets, spending

Many additional-rate taxpayers have a lot happening under the surface: salaries, bonuses, dividends, investment income, carried interest, property, sometimes business exits. But surprisingly few have seen all of it mapped in one place.

The essentials to pin down are:

• Guaranteed income – e.g. defined benefit pensions, rental income.
• Flexible income – pension drawdown, ISAs, taxable investments.
• Essential vs discretionary spending – the real cost of your retirement lifestyle, not a guess.
• Tax position – across every income source-how each pound will actually be taxed once you start drawing on it.

We’ve seen situations where City partners assumed their pension would be their main income source, but taxable investment portfolios generating significant annual income pushed them into the additional-rate band even after salaried work ended. By re-sequencing withdrawals and making smarter use of ISA reserves, substantial tax savings were achieved over the course of retirement, though individual outcomes vary based on circumstances.

For London professionals, this exercise often reveals how rental income, carried interest, or bonus-linked investment vehicles can quietly lock them into higher tax bands long after they stop working. Once the full picture is visible, better decisions follow quickly.

3. Build a tax-efficient withdrawal strategy

For additional-rate taxpayers, how you take money in retirement matters just as much as how you built it. The sequence of withdrawals can have a huge impact on how long your assets last and how much tax you pay over time.

The goal is to blend pensions, ISAs, taxable portfolios and other income sources so you stay in control of your tax position year by year, rather than letting the system decide for you.

Key areas we focus on with clients:

• Sequencing withdrawals to make best use of allowances and avoid unnecessary drag. Using ISA income or cash buffers in early years can keep taxable income low, preserving pensions for later. Although with recent budgets we’ve reviewed this and in certain situations taking the pension sooner can make sense.
• Pension timing-sometimes deferring drawdown allows investments to grow tax-sheltered for longer; other times, taking income earlier helps avoid future pinch points like LTA protections lapsing or personal allowance taper issues.
• Capital gains management-spreading gains gradually rather than realising them in a single year to stay within allowances and lower tax bands.
• Gifting and IHT planning-using regular gifts out of income or investment bonds to support family now, while reducing future IHT exposure.
• Income smoothing-blending guaranteed income (e.g. DB pensions) with flexible pots to manage adjusted net income, particularly around the £100k personal allowance taper and additional-rate threshold.

In practice, those with large ISAs, pensions, and company sale proceeds are often on track to draw pension income immediately – which can push them deep into the additional-rate band for years. Structuring the first five years of retirement to draw from ISAs and taxable reserves first can keep taxable income below the £100k threshold, preserving personal allowances and reducing tax drag while allowing pensions to grow untouched in tax-efficient wrappers, though individual outcomes vary based on circumstances.

These aren’t abstract technicalities. For high earners, the order you draw from different pots is one of the most powerful levers available. Get it right, and you keep more of what you’ve built working for you.

4. Structure your assets intelligently

Retirement planning isn’t just about where income comes from – it’s about whether your assets are in the right places, in the right wrappers, at the right time.

For many London professionals, pensions have dominated long-term planning, while ISAs have often been an afterthought. In retirement, that dynamic flips. ISAs give tax-free, flexible income. Up until recently Pensions offered powerful estate planning advantages but can be less nimble. Taxable portfolios provide liquidity but need active CGT management. Property can be a significant asset – but it comes with complexity, costs, and illiquidity that spreadsheets often gloss over.

Typical layers we review with clients:

• Pensions for tax-deferred growth and estate planning benefits until 2027
• ISAs for tax-free flexibility and income smoothing.
• Taxable portfolios for capital gains planning opportunities.
• Property, whether retained for income or sold to unlock capital.
• Business assets, where timing an exit well can have outsized tax consequences.

We often encounter situations where people assume they’ll fund early retirement by selling London rental property. When capital gains tax, transaction costs, and income profile impacts are modelled, staggering withdrawals from ISAs and taxable portfolios while deferring property sales can preserve allowances and maintain liquidity more efficiently, though individual outcomes vary based on circumstances.

It’s easy to default to whatever’s administratively simple, e.g. just drawing from the pension because it’s “there.” But the wrappers matter as much as the assets inside them. Structuring them properly gives you options, control, and can often lead to a materially better financial outcome.

5. Build in flexibility (for real life, not lab conditions)

The only certainty in life is change: markets, tax rules, health, family, even where you spend your time. A flexible retirement plan isn’t a nice-to-have. It’s the difference between reacting under pressure and adjusting with confidence.

What flexibility looks like in practice:

• Liquidity you’ll actually use
  Keep 12–24 months of core spending in cash across premium bonds and instant-access accounts. That buffer lets you ride out shocks without selling assets in a down market. Pair this with a defensive sleeve (3–5 years) in short-dated bonds or low-volatility assets, keeping the rest in global, diversified equities. Simple, boring and it works.
• Guardrails on spending
  Use a spending rule that moves with markets rather than a fixed “X% forever.” Setting upper and lower portfolio guardrails gives you a signal: if your pot rises above the upper band, you can lift discretionary spend; if it falls through the lower band, dial back by 5–10% and let recovery do its job. Clients find this calmer than guessing.
• Income smoothing to manage tax bands
  Blend ISAs (tax-free), pensions (taxed on withdrawal), and taxable portfolios year by year so you control adjusted net income. Keeping income below key thresholds (e.g. £100k personal allowance taper, additional rate) can save materially over a decade.
• Sequencing risk under control
  The first 5–10 years are fragile. Use your cash and defensive sleeve first during downturns; delay selling growth assets until markets recover. This one discipline often protects decades of planning.
• Deliberate review triggers
  Don’t tinker monthly. Set annual reviews with interim triggers if your portfolio moves ±15%, tax rules change, family events shift spending, or you change residency. Adjust, don’t overhaul.
• Optional stabilisers
  Partial annuitisation for essential spend, a small short-term gilt ladder, or deferring State Pension to increase guaranteed income-none are mandatory, but each can reduce pressure on the portfolio at the right moment.

Flexibility isn’t pessimism. It’s how you keep living the life you planned when the world refuses to behave.

6. Plan for legacy and lifestyle evolution (the next 30 years, not the next 3)

Retirement isn’t static. Spending often follows the go-go, slow-go, no-go pattern: higher in the first decade, flatter in the second, healthcare-heavy later. Your plan-and your tax and estate structure-should evolve with it.

Make the next decades work on your terms:

• Stage your lifestyle deliberately – Front-load the big “want to” items (travel, sabbaticals, family time) while energy is highest. Bake in a planned step-down in discretionary spend later so the model matches real life, not a flat line on a spreadsheet.
• Your pension and inheritance tax – a major change is coming – Right now, when you die, your pension doesn’t count as part of your estate for inheritance tax. That makes it smart to spend your ISAs and other savings first, and leave your pension untouched for as long as possible. But that’s changing. From January 2027, your pension will be counted as part of your estate. If you’re retiring before then, you might still benefit from the old rules. If you’re retiring after 2027, the strategy flips – you’ll need to think differently about which pots to draw from first. Keep your expression-of-wish form up to date so your pension goes to the right people.
• Gifts that work with HMRC, not against it – If surplus income comfortably covers lifestyle, consider regular gifts out of income-immediately exempt if structured and evidenced. For larger transfers, plan Potentially Exempt Transfers (7-year rule) or appropriate trusts. Clarity beats last-minute cheques.
• Residence Nil-Rate Band (RNRB) awareness – If your estate is near £2m, RNRB can taper away. Early planning (lifetime gifting, pensions-first spending) can help preserve the allowance and avoid unintentional IHT creep-particularly relevant for London property values.
• Property decisions with eyes open – Rightsizing, buying a second home, or selling a buy-to-let changes liquidity, tax and workload. Model net proceeds after CGT/fees, the impact on income needs, and whether the move supports how you actually want to live.
• Documentation and decision-making – Keep Wills, Letters of Wishes, and Lasting Powers of Attorney (Property & Financial Affairs; Health & Welfare) current. These don’t change your net worth-they protect your choices when you most need it.
• Philanthropy without friction – If giving matters, structure it. Donor-advised funds, charitable trusts or simply Gift Aid-efficient giving can align impact, admin and tax.

This isn’t about loopholes. It’s about aligning how you want to live, who you want to support, and what you want to leave-then structuring money, tax and paperwork so it happens cleanly.

Porta’s Take

Retirement planning for City professionals can be complex, but it doesn’t have to be chaotic. By starting with your lifestyle, understanding your numbers, structuring withdrawals and assets intelligently, building flexibility, and planning for the decades ahead, you give yourself clarity and control that most people never achieve.

This isn’t about spreadsheets. It’s about making your money work for the life you actually want to live.

You can also explore how our clients experience this transition in real life in this article. 

Important information:

This article provides general information only and does not constitute personal financial advice. The information is based on our understanding of current regulations, which may change in future. Decisions about your finances should always be made based on your individual circumstances. If you’re unsure about the suitability of any course of action, you should seek regulated financial advice. The Financial Conduct Authority does not regulate tax planning or trusts. The value of your investments can go down as well as up, so you could get back less than you invested. 

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