Now, I do not know the precise details of his financial affairs, but I would wager he had contributed significantly to the nation’s tax receipts during this process. The marginal rate of income tax payable on encashing his pensions would have been in the tens of thousands.
Add to that the stamp duty on a second home, and perhaps more significantly, the ongoing taxes associated with its maintenance and rental income.
He had briefly referred to the amount of tax he had paid, expressing surprise and disappointment at just how much he had to give up. But again, this had not deterred him.
And he has in essence used all of his retirement savings to purchase a single, relatively illiquid asset – one that may or may not produce a steady income.
My immediate thought was that he may come to regret his decisions and that ultimately, he may come to reassess this as a poor outcome, not a good one.
It does raise an interesting question when considering the assessment of outcomes under the consumer duty; it’s more subjective than we might think and goes beyond just an arithmetic analysis of the financial elements.
I did ask him whether he had considered paying for advice at any point. He said he did look at that but decided it was too expensive. I am almost certain he will regret that one day.
Jamie Jenkins is director of policy and communications at Royal London
