Holly's Blog: Ouch, pensions and our Army

11 July, 2017

Happy Friday – although not for everyone. As we speak my sweet, trusting little dog is at the vet’s, waving goodbye to his boy bags.

When dogs take over the world and write novels, I will be cast as some dystopian Commander Waterford figure (The Handmaid’s Tale). Now that I have agitated half my readers, and prompted Disgusted from Didcot to unsubscribe, let’s continue…

Pensions

How to navigate pensions and ‘drawdown’ in particular? Thank you to all of you who trusted me and responded to my question last week by sending your very detailed stories, experiences, tips and recommendations. I think making huge financial decisions can be very lonely and isolating – there’s a dearth of trust, we sit in front of PCs and wonder if we’re making some catastrophic mistake – and we value what ‘people like us’ think. So I’ve anonymised the stories, pulled together a selection of views and share them here for interest.

You can see why people are not racing to take out annuities. I did some time travel this morning, made myself 58, and used the Money Advice Service’s useful annuity calculator (https://www.moneyadviceservice.org.uk/en/tools/annuities) to see what I would get if I traded in £200,000 today for a guaranteed income for the rest of my life, to rise every year in line with inflation. £3,504 a year. Ouch. Don’t spend it all at once! It’s a real trade-off between peace of mind and a guaranteed income for life – versus the higher control but greater emotional anxiety from drawdown. I think it’s much like deciding whether to stick or twist when you get a hand of 15 in Pontoon, but of course the stakes are higher.

The Boring Money Army

We’re ending this week with a callout to our readers. Would you help us with research, join the ‘Boring Money Army’ and earn some cash along the way?

We are increasing the work we do with the industry, sharing the customer demands for change with them. Fees, jargon, value, products – we’re tackling all of these. Any longer surveys will offer an incentive which some readers choose to donate to a charity instead. We’re particularly looking to get some opinions on specific fund managers over the coming weeks…

Have a great weekend everyone. Spare a thought for the poor hound :0(

Holly