Pensions just got more flexible

Pensions just got more flexible

Spring has sprung and this April has brought us not only sunshine, but something even brighter - big changes in pensions!

Fundamental reforms, introduced in the 2014 Budget, come into effect this month. But if you don't have a clue what these changes are, you're not alone. To understand the implications, we need to take a step back and clarify some pension jargon. There are two main structures of pension provision....

The first is known as ‘defined contribution’, or ‘money purchase’ where you, the employer, or both, pay in a set amount each month. The fund grows and you end up with a pot of money at retirement. But the size of this pot isn’t fixed - it depends on how much is put in when, investment returns, charges etc. And the pension income you end up receiving is unknown until you start drawing from this pension pot.

The second structure is a ‘defined benefit scheme’, known as a ‘final salary pension’, which pays out a guaranteed level of pension income based on your income when you retire and the number of years you’ve been working.

Most people today are in a ‘defined contribution’ scheme, and the current reforms are mostly in relation to this. So what’s changed?...

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What are we giving our children at Christmas?

What are we giving our children at Christmas?

I was chatting to my hairdresser the other day, having the conversation we’re all having at this time of year: “You all set for Christmas? Done your shopping yet?” She said she was all ready, excited for her young children aged 7 and 10, and revealed that her budget was £500 per child.

I left the hairdresser reeling a bit from this figure, and the wider implications of that kind of spend. It set me thinking about what we’re actually giving our children at Christmas. Every parcel under the Christmas tree is wrapped not just in sparkly paper and ribbons, but in many layers of belief and attitudes and values. While the actual presents may soon be forgotten, these extra layers often stay with people for their whole lives – affecting how they deal with money, love and giving in adulthood.

It's these beliefs and attitudes...

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Coping with money worries

Coping with money worries

The words ‘money’ and ‘worries’ go together so often they can seem inseparable. For many people, their relationship with money is fraught with anxiety. In Sheconomics we talk about ‘Money Anxiety Disorder’ (MAD) – a fixation with money worries and a persistent sensation of simply not having enough. I also come across something I call ‘net worth anxiety’ – where people assess themselves at a certain stage of life and compare themselves to friends or colleagues or to their own expectations, and feel that they’ve fallen behind.

Money worries can leave you trapped in a relentless cycle of anxiety.

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Breathe into fear and make a wish

Breathe into fear and make a wish

“Courage is not the absence of fear, but rather the judgment that something else is more important than fear." - Ambrose Redmoon.

I was just standing in a queue in a newsagent where the guy in front of me was buying a lottery ticket, reflecting on a conversation I had this morning with a client. He was telling me about a book called 'The Big Leap' where the author, Gay Hendricks, talks about how fear and excitement create the same sensations in our body, but that we try to get rid of the feeling of fear by holding our breath. Excitement can also turn into fear by holding our breath - just think 'rollercoaster rides'!

Instead, he suggests, that...

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