View more on these topics

Tony Wickenden: Hard times mean making tough choices


I am a big fan of Seth Godin and have been for some time now. I have Chris Woodhams of Prescient to thank for that.  Over the past couple of months, in among all the good stuff that is thrown out daily for free on Seth’s blog (, three pieces in particular resonate with the times we are living through. 

Exciting times. Game-changing times. Hard times. Hard times we should embrace because out of the hardness comes opportunity.

I have quoted from these blogs before. All three together really ram home the message though. Life is hard. Accept it.  No, embrace it. But for those looking to make a living out of difficulty, opportunities abound. 

As Ringo said… “Rock on George for Ringo one time” …well, he did midway through Honey Don’t on The Beatles For Sale Album but the Ringo line that I had in mind in this context is: “It don’t come easy” …Success in financial planning that is.

Ask Seth. To quote from one blog, he says: “In an industrial setting, the obvious plan is to seek out the easy work. You’re more likely to get it done with less effort and then move on. The easy customer, the easy gig, the easy assembly line.

“Today, though, it’s the difficult work that’s worth doing. It’s worth doing because difficult work allows you to stand out, create value and become the one worth choosing.

“Seek out the difficult because you can. Because it’s worth it.”

Consider the “game changers” going on at the moment. All the changes referred to below do (or will if implemented) force choices to be made and the right choices cannot be made without a full understanding of the consequences. And that is why advice will be so needed. 

 1: Pensions drawdown reform

We have had the Freedom and Choice consultation and we now have some draft legislation and guidance and some more specialist technical consultation. 

From 6 April 2015 you will be able to take all your money from a defined contribution scheme at age 55 (57 and upwards in the future), with no need to buy an annuity. Game changer? Yes. But perhaps more than any other game changer, this brings into sharp relief so many choices. 

Whether to take your money all at once from your pension, leave it invested, draw it down or buy an annuity. All have different consequences and these need to be fully understood before a decision is made. 

Most having to make these decisions will have other assets, so the choice of whether and how to take money when it is needed cannot be restricted to the pension fund. This conundrum has been made even more challenging by the latest proposals in relation to “death taxes” on pensions. Will this require advice? Of course it will. It is hard.

2: Potential further pension input/tax relief reform

The Centre for Policy Studies, the Institute for Fiscal Studies and the pensions minister all seem to be constantly proposing changes. These proposed changes (only ideas at the moment) include: 

  • Removing or reducing NIC relief on contributions
  • Removing tax-free cash
  • Removing the lifetime allowance
  • Reducing the annual allowance to £30,000 and sharing it with the Isa
  • Introducing a lifetime Isa. A £30,000 annual input limit, shared with pensions, and with the Government contributing 50p for each investor – contributed per pound up to £8,000. So at £8,000 of contribution the maximum Government input would be £4,000. 

Oh, and as a corollary to the 50p Government contribution for every £1 saved, the removal of tax relief on pensions contributions as we know it. 

3: The Lifetime Isa  

Ok, only a Centre for Policy Studies proposal, not official consultation, but Michael Johnson (as well as being a peerlessly upright 400m champion and brilliant “big athletics” commentator) is apparently well “listened to” in official circles. So we cannot ignore a proposal for a Lisa which could just take over from pensions. Perhaps this could be supplemented with a Bart (Better At Retirement Transactions) initiative. Couldn’t resist it …D’oh!

4: Anti-avoidance – the stuff of legend 

The general anti-abuse rule, targeted anti-avoidance rules and relentlessly successful litigation have removed the public appetite for aggressive tax avoidance (cue loud cheering from the vast majority of the financial planning sector).

And there is more, like accelerated payments, tougher Dotas provisions and the guidance guarantee. Uncertainty, difficulty, hard stuff but it all has to be embraced.

Given the apparent preference of increasing numbers of consumers for financial planning founded on a mix of digital “self-serve” and bespoke advice when needed, smart, low-margin, transaction-based models will be an essential component of the client proposition for many advisers. In relation to the “advised” part of the offering, though, it is the hard stuff that clients will want advice on.

Tony Wickenden is joint managing director at Technical Connection

Access full CPD, technical updates and business generation ideas through Techlink Professional.  Go to and click the Contact Us link at the top of the screen and then request your free trial from the drop down menu. 



Leaked letter reveals Wonga thought it was worth £15bn

Embattled payday lender Wonga predicted the firm would have been valued at £15bn by 2015 once it had floated on the stock exchange, a leaked letter reveals. In a bid to stop staff quitting in April 2012, Wonga sent a letter to 10 employees in which it said the firm would be worth £15bn, based […]


Govt criticised over ‘harsh’ Budget freedoms disclosure penalties

Experts say the Government must rethink a new requirement for individual scheme members to alert providers when they access the Budget pension freedoms. The Taxation of Pensions Bill, published last week, revealed details on the tax changes that will underpin the Budget reforms. And today Money Marketing revealed how individuals could face fines in the […]


Advisers warned over auto-enrolment charge cap dodge

Advisers should beware of providers trying to dodge the charge cap on default pension funds by opening new schemes, Aviva head of pensions policy John Lawson warns. The Government’s latest paper on charges levied on auto–enrolment funds reveals more details on the 0.75 per cent charge cap, including the omission of schemes that offer guaranteed investment […]

Gerry Brown peach

Case study: Trustee duties and the role of bonds

George and Andrew have recently been appointed trustees of a family trust set up by their late father David. On reviewing the trust papers they find the trust fund is worth about £200,000. Two-thirds of this is held in deposit accounts with different banks; the remainder is held in “blue chip” equities. George and Andrew […]

The Merchants Trust PLC – April 2017

Welcome to the latest update for The Merchants Trust PLC from the Trust’s portfolio manager, Simon Gergel. Portfolio Review The Merchants Trust reported results this month and the directors were pleased to announce a 35th consecutive year of dividend growth (subject to shareholder approval at the AGM). The Company is proud to be highlighted as […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. What would have made eminent sense is to disallow encashment unless the individual can prove other pension incomes now (or later, upon the relevant qualifying ages) exceeding the State Pension guarantee level – or whatever level could be set to ensure basic State Income Support would never be needed.

    Then they would need to buy an annuity/deferred annuity for the difference to protect the State.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm