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Ht talk to ifoa dj ht fin v3

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How can we help people make tough financial decisions?

Publicado en: Educación
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Ht talk to ifoa dj ht fin v3

  1. 1. Helping people making choices – "how can we make financial decisions easy?" Henry Tapper First Actuarial 21 May 2015
  2. 2. 2 Information is unprocessed knowledge
  3. 3. The ladder of abstraction leads nowhere 13 May 2015
  4. 4. For example….
  5. 5. Agenda • The three “E”s – theory • The three “E”s – practice • Information overload • Now, let’s start back at the beginning – I want to tell you a story about pension freedoms
  6. 6. Agenda • The three “E”s – theory • The three “E”s – practice • Information overload • Now, let’s start back at the beginning – I want to tell you a story about pension freedoms
  7. 7. 7 Three “E”s in theory “Giving people the confidence to make good financial decisions” Engage Educate Empower
  8. 8. 8 Engage – People engage with people – We believe face to face is the best way to engage Educate Empower Three “E”s in theory “Giving people the confidence to make good financial decisions”
  9. 9. 9 Engage Educate Empower – Once people are interested, they are ready to learn – Clear, simple explanations Three “E”s in theory “Giving people the confidence to make good financial decisions”
  10. 10. 10 Engage Educate Empower – Once people understand, they are ready to take action – Helpful, clear guidance Three “E”s in theory “Giving people the confidence to make good financial decisions”
  11. 11. Agenda • The three “E”s – theory • The three “E”s – practice • Information overload • Now, let’s start back at the beginning – I want to tell you a story about pension freedoms
  12. 12. 12 Educate “You will be much better off if you minimise your marginal tax payment in each year that you draw your pension.” Three “E”s in practice “Giving people the confidence to make good financial decisions”
  13. 13. 13 Engage Educate Empower “Shall I show you how in words and pictures?” “I bet you hate paying tax?” “Did you know it is possible to reduce the tax you pay on your pension?” Three “E”s in practice “Giving people the confidence to make good financial decisions”
  14. 14. £30,000 Salary NI 12% Tax 20% NI 12% Tax 20% Tax at 0% Tax at 0% Salary £30,000 Salary Salary £30,000 Salary Salary Tax 20%Tax at 0% £0 £8,060 £10,600 £42,385 Nat’l Ins 2% Tax 40% What you take home Salary £30,000 Tax of £3,880 NI of £2,633 Nat’l Ins 12% Take-home of £23,487 Nat’l Ins 0% First, how tax works on your salary… Income tax Nat Ins
  15. 15. £30,000 Pension Tax 20% Tax 20%Tax at 0% Tax at 0% Pension £30,000 Pension £30,000 Pension Tax 20%Tax at 0% £0 £8,060 £10,600 £42,385 Nat’l Ins 2% Tax 40% What you take home Pension £30,000 Tax of £3,880 Nat’l Ins 12% Take-home of £26,120 Nat’l Ins 0% Income tax Nat Ins Now, how tax works on your salary…pension…
  16. 16. 16 Engage Educate Empower • So, you have saved incredibly hard and have £200,000 in your defined contribution pot • You’ve decided not to annuitise • You’ve even heard you can take it all in one go… • So shoud you…? Three “E”s in practice “Giving people the confidence to make good financial decisions”
  17. 17. 17 with the tax muppetometer
  18. 18. 18 with the tax muppetometer
  19. 19. 19 with the tax muppetometer
  20. 20. 20 The small print We have used 2015/2016 tax allowances, ignored investment returns and inflation and not tried to predict how HMRC might bend the rules in the future, which they undoubtedly will. Allowing for these might change the numbers a bit, but would also make the model less user friendly although we doubt the underlying messages would change. Namely, spreading your DC pot over a number years will, for most people, mean paying less tax. with the tax muppetometer
  21. 21. Agenda • The three “E”s – theory • The three “E”s – practice • Information overload • Now, let’s start back at the beginning – I want to tell you a story about pension freedoms
  22. 22. Information = Knowledge≠
  23. 23. Agenda • The three “E”s – theory • The three “E”s – practice • Information overload • Now, let’s start back at the beginning – I want to tell you a story about pension freedoms
  24. 24. This is how we make decisions easy
  25. 25. 13 May 2015 25 The views expressed in this presentation are those of the presenter. Questions Comments

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