What will you be doing in ten years’ time? Most of us will be able to give a rough answer to this question but how many can respond with absolute certainty, knowing their answer will not change? With a fast moving and increasingly accessible world, we do not all follow a set life plan and no two journeys are ever identical.

A study carried out by The Association of Accounting Technicians (AAT) in 20151found that throughout their working life, the average Brit will work for six different employers and retrain for an entirely new role twice. The earnings and benefits accrued through such a career will fluctuate accordingly.

Choices throughout retirement have also become more varied. Pensions and products which provide a known, guaranteed income for life are less prevalent. Many final salary schemes are now closed and annuities have proved less popular over recent years due to a fall in the rates: changes which are in part driven by an increase in life expectancy.

With changing work patterns and a wider range of retirement options now available, individuals increasingly need to engage with and review their financial strategy throughout retirement as well as during their working life.

At Holden & Partners we help our clients to plan and achieve their financial goals. We understand that every individual has their own aspirations and priorities, whether that is to stop work by a certain age, help the grandchildren cover the increasing cost of education or to have sufficient assets and income which allows for a few of life’s luxuries.

We believe having a financial plan in place is an excellent foundation to help achieve your goals and this is where cash flow planning can help.

What is Cash Flow Planning?

A cash flow plan is an assessment and projection of your assets, income, and expenditure over your lifetime. The aim is to assess how likely it is that you will be able to meet your essential and desired expenses every year.

We start by discussing your goals and aspirations and mapping out milestone events in your own timeline. An example of a timeline from age 50 to 100 is shown below;

The next step is to build in your current assets and income, alongside your regular expenses and any one-off costs you are expecting. By making a number of prudent assumptions (“best guesses”), for example about the future rate of inflation and investment returns, we crunch the numbers to provide your base plan. This looks at each individual year and tells us whether your capital and income can support your expenses, i.e. if you are likely to have an excess or a shortfall.

The results of the cash flow help you to visualise the shape of your financial life. The projections will show how the value of your assets could change over time as demonstrated by the example below.

In this example, the invested assets are accumulating in the pre-retirement years (between age 50 to 65) as regular savings are made to pensions and investments. At retirement (age 65), the client begins to draw on their investment portfolio to support expenses throughout retirement, resulting in a steady decline in the asset value.

This projection also shows that there is some value left in the invested pension portfolio at age 100. This provides peace of mind that the desired level of spending can be met but also the confidence that there is room for flexibility in the plan.

What if My Plans Change?

Once a base plan is in place, we can assess a wide range of hypothetical situations to test the strength of the plan. We call these “What if Scenarios”. For example, “What if I want to retire early, how much can I spend?” “What if I make a gift to my children to help them buy their first home?”.

This can be a useful tool when faced with large or daunting decisions as it can demonstrate the potential impact on your overall strategy. This long term context enables clients to make more informed short-term decisions. It is also important to revisit the plan on a regular basis to assess if you are still on track but also to account for any changes that inevitably happen along the way.

A cash flow plan can also be used to identify potential shortfalls and appropriate solutions to prevent this. For example, providing clarity on how much you would need to save on a regular basis to meet your target or the impact a planned downsize in your property could have on your spending capacity in retirement.

Our aim is to provide clarity and peace of mind for our clients whilst empowering them to be confident in their financial decisions. We understand that each plan is personal and believe it is crucial to consider the longer term as well as more immediate objectives. A cash flow summary is just one piece of the financial planning puzzle which can help you plan a secure and successful future.

The content of this article is for your general information and use only and is not intended to address your particular requirements. It should not be relied upon in its entirety and shall not be deemed to be, or constitute, advice.


  1. https://www.aat.org.uk/news/article/work-numbers

Contact us

Whether it’s a question about your personal finances or how you can invest your wealth ethically, we are here to help. Call us on 020 7812 1460, email info@holden-partners.co.uk or complete the form: