So far, in case you have been living under a rock and have missed all the fun, we have seen Donald J Trump inaugurated as the 45th President of the United States, and the UK government told that Parliament has to have a say on the triggering of Article 50 before the PM can fire the starting gun on Brexit.
We now have a reality TV star holding the codes to the world’s largest nuclear arsenal, and President Trump has already shown he is not afraid to follow through on the campaign promises he outlined on his way to the White House. Yes, the wall will be built between the US and Mexico, and yes, he fully expects Mexico to repay the cost of building that wall although clearly the Mexican government has its own ideas about this.
The Dow Jones reached record highs last week having busted through the 20,000 threshold for the first time everThe market reaction to both President Trump’s inauguration and the news that Parliament must vote on Article 50 before it is triggered? Well, the Dow Jones reached record highs last week having busted through the 20,000 threshold for the first time ever, and the FTSE 100 – which has been hitting record highs for the first two weeks of this year before falling back slightly - also rallied a little after the Supreme Court ruling as the pound slid. But the roles were reversed when the pound started to regain some of its lost ground on the day the announcement was made.
We also have a new phrase that has been brought into the English language this year – alternative facts. Interesting if you ask me, since I had always understood facts to be just that, pretty irrefutable. But hey, this is 2017, so who knows what will happen next?
While all of this excitement has been making the headlines around the world, the rest of us have been ‘getting on getting on’ and dealing with the more mundane but, ultimately, probably more important tasks from our point of view of living our everyday lives. The big political ramifications of the ‘movements’ surrounding the Trump presidency and the Brexit vote have no doubt influenced many of us as to how we feel about things right now, but even when that comes to pass, it will take time for those decisions to impact on the man on the street in a really significant way.
So, what have the rest of us been up to while the politicians have been cooking up a storm? Well, it seems we have been very sensible, at least when it comes to taking money from our pensions. We have quietly been taking £9.2bn from our pension pots since pension freedoms were offered to us in April 2015, according to official figures from HM Revenue & Customs. In the past three months 162,000 people took out £1.56bn out of their pensions – which amounts to £9,630 apiece.
Certainly not enough to put a down payment on a Lamborghini, much less buy one outright. You will recall this was a concern of opponents of pension freedoms, that some might snaffle all their money in one hit and spend it on fast cars and fast living, while squandering the rest to paraphrase George Best.
But no, our fabulous UK pensioners seem to have their heads screwed on when it comes to dealing with their pension funds, and they realise that temperance is a necessity if they are going to make sure their funds do not expire before they do.
The figures were released by HMRC along with a statement explaining that there had been 3.7 million visits to the Government’s Pension Wise website, and around 100,000 appointments for advice made as a result. Now, I do not profess to be a marketing genius, but when 162,000 people have taken money out of their pension pots in the past three months alone, there is a significant number of people either using other sources of independent financial advice – great news - or not wanting or getting any kind of advice at all. That is a bit of a worry.
Not taking advice before exercising your pension freedoms would seem at best foolhardy, because without a thorough understanding of what you can afford to withdraw to ensure you have enough to live on for the rest of your life could result in financial disaster. Advisers have a huge role to play here, and most I am sure are already dealing with significant numbers of queries.
However, given the figures we have from HMRC showing the amount of caution being taken in withdrawals by pensioners versus the relative lack of caution we are currently seeing from our politicians leads me to one conclusion – despite initial concerns to the contrary, we know far better how to spend our money than they do.
Alison Steed is a freelance journalist
