Blog: Pension freedoms - a Pandora’s Box

Frank Morton
Frank Morton

By Frank Morton, Director of Wealth Services at AAB Wealth


Remember when retirement “happened” at 65?

Your pension was never a fund. That was something locked away out of sight and mind.

Your pension was the income you got when you retired.

Pension freedom was a game changer, it made people think differently.

It put a Pandora’s Pension Box on the mantelpiece, next to a shiny key and a note saying “go on, you know you want to”. Understandably most over 55’s rushed for a quick peek, and the rest as they say is history. Savers have withdrawn £5.9bn since pension freedom reforms, according to the Association of British Insurers. Was every decision wrong? No, but many were.

For some, it was mental torment having money in a box that could be in their pocket. Now where did I put that holiday, car, conservatory, brochure?

We are conditioned to wanting it “now”, regardless of damage done to our future.

The Pandora’s Box legend is well known. Thirst for revenge, a beautiful woman, a mysterious gift, an impulsive act which changes the world. Cue Hope the saviour, cue music and closing titles.

Cue Hope. How do we stop making poor decisions?

Cue adviser.

Cue conversation.

Cue informed decision.

It’s been said that what stands between a client and a poor decision is an adviser. The potential contrasting fortunes between those who leave money invested, and those who withdraw it is significant.

Consider -

  • If I do this now, what can’t I do later?
  • What about taxes and cost?
  • Could I really do better somewhere else?
  • Do I need the money?
  • Planning is difficult. There are so many choices and consequences.

    Leave the box alone. Take time. Explore all the options.

    There are always two ways to do something. The easy way, and the right way.

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