'What happened to the £10m I promised to donate to charity?' blog discussion

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.


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  • jamesdjamesd Forumite
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    Some suggestions about things to consider in the financial education and planning sphere:

    1. US research that I'm trying to educate people about shows drawdown income potential as much as 50% higher with the same success rate or the same with higher success rate using relatively simple rules. But that's based on US analysis, not UK and ignores hugely important UK specific options like deferring the state pension, which at 5.8% inflation-lined soon will offer equity-level returns without equity-level risk. Commissioning researcher Wade Pfau or perhaps someone at the City University team* to develop UK-specific plans would be a good investment in future income for UK retires.

    2. Accumulation phase planning is often very poorly done with ballpark rules rather than consideration of individual goals, how to achieve than and how to achieve objectives like early retirement. A UK-specific version of he popular Firecalc tool would be useful for UK planning and in particular for illustrating the issue of investment risk and success or failure probabilities, an essential part of investing education.

    3. The low value annuity market should be devastated by the option to defer the state pension, but it hasn't been and in spite of the FCA's work it probably won't be. It's not hard to explain how spending the same amount of money on deferring as on standard annuity purchase can pay three times as much inflation-linked income (at 10.8%) or twice as much (at 5.8%). So MSE could usefully do this work to improve incomes for pensioners. The deferring will also usually beat enhanced annuity rates, but sometimes not.

    I know that you have historically preferred not to deal with uncertainty but we simply don't have that choice today unless we're in the public sector or the now largely obsolete for newcomers private pensions. We have to up our educating about volatility and risk game.

    In a more ambitious level is lifetime financial planning, covering things from building up a property deposit through raising children costs and retirement planning. Freely available tools for this would be very useful, if we can get people interested in usi9ng them.
  • boatmanboatman Forumite
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    Thank you Martin, its great to see the share price rise too!
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