Opinion: Choice, not chance, determines financial destiny

Hippie Group Walking on a Countryside Road

However nomadic your future plans might be, it's possible to ignore that money can be integral to your ambitions - Credit: Getty Images/iStockphoto

Thinking that lockdown was likely to last only a couple of weeks at most, this time last year I began preparing a list of possible semi-retirement ambitions and objectives, partly as a way of acknowledging that a period of ‘winding down’ from full-time work was an essential precursor to eventual retirement.

The well-thumbed, consistently revised and updated list contained several plans which were (and remain) based upon my wife and I being fortunate enough to continue enjoying good health, a far more important consideration than how much money we may need.

Good health trumps cash in the bank every time, but it would be stupid to suggest we’re intent on dropping out, hippy-style, and rejecting the notion that the filthy lucre is integral to several of our future ambitions.

‘Travel more’, for instance, is a deliberately broad (and potentially expensive) entry on the list of retirement objectives intended to encompass everything from the spontaneous weekend away to long-stay, long-haul holidays.

Other entries require time: further research into a nascent family tree, for example, or a regular undertaking to do some volunteering work. A friend involved with a swimming club wants me to become a swimming coach, which certainly requires commitment; I would dearly like to become a much better piano player and overcome my innate lack of musical talent by practicing for longer.

Yet having assembled a comprehensive, retirement ‘to do’ list, the pandemic dragged on and on and all of those plans for travel, tracing the family tree and a host of other ambitions were placed on indefinite hold.

Frustration is a sensation millions of normally active folks have experienced for more than a year. However, rather than be angry and exasperated, the most logical course of action was to use lockdown as an opportunity to focus on the financial aspects of retirement.

Most Read

In between browsing websites showing how long your pension pot may last, subject to a range of different criteria, my most important pre-retirement task has involved planning to bring the pensions under one umbrella.

I’m not scheduled to receive a state pension for a good few years, but I do have two similarly-sized pension pots and it makes sense to consolidate the pair. The problem I’ve grappled with is this: one pot is managed and comprises mostly shares in UK-listed companies; the other, which is self-managed, has a much broader global scope and a far greater number of holdings. While both pots experienced a setback last March, they’ve since performed admirably.

Soft focus photograph of two hands playing piano

Finance expert Peter Sharkey planned to use lockdown to nurture his skill at the piano - but has instead used the time to make sure his investment strategy is up to scratch - Credit: Getty Images/iStockphoto

So while I should be devoting more time to practicing scales, arpeggios and broken chords or investigating where my great, great grandfather lived, instead I’ve been trying to decide what to do with these important assets.

There’s an old saying: “A man cannot go anywhere while he’s straddling a fence”, but wading through the massive volume of investment choice is undoubtedly a challenge. Furthermore, selecting correctly from a mix of unit trusts, investment trusts, gold, property, ETFs, shares, bonds and a host of other securities depends broadly on an investors’ attitude towards risk.

I’m disinclined to take on ridiculous levels of risk, not least because it’s taken so long to build the pension pots, but I would like to believe that an ultimately consolidated single pot would continue to grow, even modestly. After all, as those ‘will your money last?’ websites remind users, it would be foolish to ignore the impact of taxation and inflation over the longer term.

Unfortunately, however, matters are complicated by current circumstances. What might be called the ‘traditional, diversified low-risk’ investment mix of global shares, gilts or bonds, gold and cash is not quite as attractive as in the past because bond prices have soared. Instead of rising share prices offsetting a fall in bond values (the norm), both have moved steadily upward.

Hand with tree growing from pile of coins, concept for business, innovation, growth and money

Taxation and inflation will impact pension pots, says finance expert Peter Sharkey - Credit: Getty Images/iStockphoto

Economists believe that should inflation and interest rates rise, both bonds and share prices could suffer a simultaneous fall. Not a great scenario for those of us on the cusp of a pre-retirement ‘wind-down’ because we have less time to recoup any losses.

Nevertheless, my inclination is to stop straddling the fence, climb down and stick with the traditional low-risk investment approach. Now all we need is for all restrictions to be eased by the end of June in order that our time as a semi-institutionalised nation comes to a conclusive, never-to-be-repeated end. Hallelujah.


  • 4 - Reports in the USA reveal that the White House employed ‘up to four’ full-time staff to write all of President Trump’s tweets during his period in office. Bad news for those folks who believed the world’s most powerful man was awake posting entries on social media in the wee small hours.
  • $68 billion - Melinda Gates looks set to receive the largest divorce settlement in history as she and her husband Bill divide almost $150 billion in assets. The couple’s investment portfolio alone is worth an estimated $16 billion.
  • 250 miles - Such is the mess caused by pigeons in the middle of Hungerford, Berkshire, that the town council has proposed radical action: to capture the birds and send to the seaside town of Whitby, 250 miles away. We imagine Whitby’s residents are delighted.

ONLINE: Equity release is now mainstream
Read Peter Sharkey's blog exclusively at www.moneymapp.com/blog