Brain’s desire for ‘instant gratification’ can wreck future finances

Most of us prefer to the thrill of buying now rather than saving and safeguarding our financial future, according to new research from the Skipton Building Society.

But it may not be all our fault as our brains are not programmed to behave in our own best interests when it comes to money.

Retirement DNA21 (2)

Leading neuroscientist Dr Jack Lewis explains the need for us to retrain our brains


As part of a campaign to get under the skin of the nation’s retirees, it’s been revealed this week, by Skipton Building Society, that our brains could have a lot to answer for, when it comes to the nation’s lack of preparedness for retirement.

• Over 50% feel unprepared for retirement 10-15 years out

• 30% have no idea how much is in their pension pot

• Physiological testing illustrates people confused about their futures

• Desire for immediate gratification creates barrier to financial planning

• Our brains need to be retrained to create stronger financial futures

As part of their DNA of Retirement research undertaken earlier this month, (which is believed to be a first for UK financial services) physiological responses were explored to provide a 360 degree insight into hopes and fears surrounding retirement and financial planning for our futures.*

It was revealed that over 50% were feeling unprepared for retirement at 10 to 15 years out, with 30% having no idea how much money is in their pension pot. Worryingly, nearly a quarter of people revealed they don’t have a retirement plan. Overall, anxiety was evident as nearly two thirds of retirees lacked the confidence that they are financially prepared for their retirement.

In follow up, Skipton, the UK’s fourth largest building society, has been working with leading neuroscience consultant and published author of best selling book‘Sort your Brain Out’, Dr Jack Lewis. Together, they can now reveal further insights from the analysis of the research data, which shows that our neurological programming could be a huge stumbling block in our pension planning.

Dr Jack said: “Our brains are not designed to ensure we are financially prepared for the future. In today’s fast paced world our brain is still tuned into instincts honed several millennia ago which encourage us to seek immediate gratification. If I offered a room of people £100 cash today, or £150 cash in a month, the majority would take the “safe” instant £100. This is because our brains are biased in favour of any decisions that give us a quick return. Of course, if we allow every financial decision we make to fall into the ‘live for the moment’ trap – then clearly the nation’s financial preparedness for retirement will be in a dire state.”

This is accentuated even further if we are not clear what our futures look like and confusion around our vision was also a key finding of the DNA of Retirement research. Most people, when questioned, described clear and inspired plans, covering aspirations from wing walking to starting new businesses. However, 64% of people’s physiological responses contradicted their stated desires. For example, what they said they wanted and what their subconscious revealed they wanted were different things.

Other findings of the research were that a significant proportion of the respondents were very aspirational about their futures, and the aspirations they had for retirement were quite elaborate. However, it didn’t appear that these dreams were matched by financial preparedness, thus illustrating a HUGE risk in terms of financial stability of our futures.

Dr Jack added: “The brain is a complex organ. We can shape it and mould it according to any behaviour that we regularly, intensively and consistently perform. However one critical step that is often overlooked is the need to consciously steer ourselves towards behaviours that yield the best return in the long run. As a general rule we tend not to care much for the best interests of our future selves. It is important to spend time vividly imagining the big picture to focus our mind on long term goals. If we never take the time to think about what kind of lifestyle we want to be living in retirement, then we simply have nothing to set our sights on. Asking people to financially plan for something that their brain is not emotionally engaged by is a big ask when we have so many immediate financial concerns. We can re-wire our brains by adopting new habits but to do this we first need to subtly alter our behaviours, beliefs, and motivations according to the best interests of our future selves.”

As part of their commitment to supporting people in and approaching retirement Skipton has launched a free Retirement Review** service in all branches nationwide, where people can call in and have a chat with a financial advisor to help them start to picture what kind of retirement they want, to then help them plan for it. They are also developing a persona app to help people visualise their future based on their own personal Retirement DNA, which will be rolled out in branch in the coming months.

David Cutter Group Chief Executive of Skipton Building Society, said: “Our research has revealed some worrying trends – we cannot have a country bursting with aspiration whose hopes will then be struck down by apathy or aversion to financial planning.

“As a mutual, we were established 161 years ago to help tackle the prevalent social issue of the time – helping ordinary people to build their own homes. Through our new retirement service, we’re bringing this ethos bang up to date by tackling THE financial issue of today.”

Skipton, the UK’s fourth largest building society, is keen to gain a true understanding of people’s retirement wishes, in order to be able to help them realise their goals, in line with its new Retirement Service.Skipton is currently offering a free will for anyone who has a free Retirement Review in any of its branches.

Escaping Debt & Poverty – new ebook guide

There’s no point in denying it; tens of millions of people are having their lives ruined by painful debt or poverty. One side-effect of this crippling affliction is the apparent lack of control and inability to stop further decline. Thankfully, philanthropist Tony U S Okwum has the answer, and it’s stupidly simple.


Everything is exposed in his new book, ‘Escaping From Debt & Poverty’, which opts for proven everyman strategies instead of official advice from the government and financial controllers who only have their best interests at heart. According to the book, poverty is a mindset and not a circumstance – and anyone now has the ability to finally understand money and its direct relation to life’s purpose.


This is the right book for the right moment. This is the right book on a mission to change your life. For those who are perpetually in debt and experiencing heavy blows from money, this is the right book for you and for those who want to come out of poverty, this is for you.

Do you want to maximize what’s inside of you? Do you want to see your potential come to light? I strongly believe that this book will reshape and rebuild you to the real person you always wanted to be by overcoming financial debt and poverty.

Your greatest enemy in life is the wrong information that has settled in your subconscious mind which has made you to believe that you can never come out of debt and poverty. And this has almost made you to give up. In this book is the solution to that chronic problem- debt and poverty. The economist won’t educate you better and the government won’t tell you the truth, but this book will always lead you along the right path.

“The truth is that people already have everything they need inside of themselves; the key is to change their mind-sets and thought patterns surrounding money. They have to hate poverty enough to want to change it!” explains Okwum. “So-called professionals won’t be of any help, but my book will. Everything has been heavily tested and is unique as it has the readers’ best interests at heart. There’s nobody else trying to make money or pick up commission. That’s a rare thing these days.”

Continuing, “At the end of the day, it all comes down to control and if people want money to be their master or if they want to make it their servant. If someone’s money controls them, a simple shift in power is all that’s needed. When we change the old the new can come in to replace it, but the two can’t co-exist. The blueprint for doing just that is waiting. Become your own personal entrepreneur; if we all did it, the world would be a richer place.”

Readers agree, leaving positive reviews.

Sonia Andrews comments, “These days when everybody is hard hit financially. And the truth is that people just don’t know how to come out with solution and the government is not making it easier either. They are clueless. This book takes you into the world of financial reality. It’s straight to the point and blunt. This book is something you really need to have as an asset. Debt and poverty is crippling. This book is the real deal. It has highly enlightened and empowered me. Now I’m completely transformed after being trained and educated by this book. I can now recommend this book to anybody of any age. This little book has great power in it that can transform your financial life and affect your potential positively.”

Click on this image to buy the Kindle editiion at Amazon for only £1.99

1 in 5 couples has no financial plan for retirement

New research from Prudential has found that couples in the UK are happy to talk about their money, but struggle to turn these conversations into concrete financial plans for the future.


The annual survey, analysing attitudes to money and retirement planning among co-habiting couples aged 40 and over, found that nearly four in five couples (79 per cent) have discussed their finances in the last year, but more than half (52 per cent) admit that these conversations haven’t led to them agreeing a target figure for their joint retirement incomes.

  • 4 in 5 couples have discussed their finances in the last year
  • But more than half have failed to turn these conversations into financial plans for the future
  • Nearly 1 in 5 couples don’t even know where their main retirement income will come from

This figure rose to more than two thirds (67 per cent) among couples aged 45 to 54 – the crucial years in the lead-up to retirement.

This failure to turn conversations about money into actual plans for the future is further demonstrated by the fact that although nearly three fifths (61 per cent) of couples over the age of 40 have discussed retirement planning in the last year, one in five (18 per cent) still admit to not knowing where their main source of retirement income will come from.

Even more worrying is the fact that a quarter (25 per cent) of couples over the age of 40 have retirement funds that will only provide an income for life to an individual – rather than to their partners as well.

Prudential’s research took place six months after the Chancellor of the Exchequer announced sweeping changes to pensions, savings and retirement income choices in the 2014 Budget. Three-quarters (74 per cent) of couples over the age of 40 said that they are aware of the changes, and 29 per cent of them have discussed the implications with their partners.

However, despite this apparent awareness of the choices and opportunities now facing savers and retirees, only one in five (20 per cent) couples over the age of 40 say that one or both of them has consulted a financial adviser in the last five years, and only one in 10 (nine per cent) have had a joint meeting with their spouse and a professional adviser or retirement specialist. Meanwhile, the vast majority (70 per cent) of couples have never seen a financial adviser to discuss their retirement plans.

Vince Smith-Hughes, retirement expert at Prudential, commented: “The gulf between those who are aware of retirement issues and recently announced Budget changes, and those who discuss the implications openly with their other halves is alarming. However, simply having conversations about money is not enough. Taking action always needs to be the next step.

“For many couples, the first step to agreeing and securing a target income in retirement should be seeking professional financial advice together. As retirement becomes a more immediate prospect, a professional adviser or retirement specialist can help couples to make the right decisions about generating an income in retirement.

“Independent organisations such as The Pensions Advisory Service (TPAS) provide information free-of-charge to couples who are embarking on those often tricky initial conversations about retirement planning.”

Donna Dawson, psychologist and relationship expert says: “Although money appears to be a straightforward black and white issue about numbers, it is actually a very complex and emotional subject. Money discussions can often lead to disagreements between couples – misunderstandings, sulky silences and angry rows.

“One way to reduce the emotional impact of financial discussions is to write things down, so that the options can be viewed by both partners objectively. Writing down the pros and cons of situations can help to clarify and contextualise the issues. Once couples start to discuss their finances, they should stick with the discussion until they find a solution – calling in a financial adviser if necessary.”

Britain’s nation of holiday money hoarders

Almost half of us returning from holiday with foreign currency squirrel it away with a plan to use it for the next trip, rather than bother with the hassle of shopping around for the best exchange rates to convert it back into Sterling. This is according to a survey of over 2000 holidaymakers by ICE – International Currency Exchange, the leading travel money provider.

• Almost 50% of UK travellers hoard holiday money at home
• 1 in 3 spend it at the airport
• Only a third bother converting it back to Pounds when they arrive home


Taking the pain out of organising currency conversions back into Sterling, the ICE Buy-Back service allows travellers with left over foreign currency, to get an exchange rate quote via text.

According to the ICE survey, 49% of UK travellers come home with currency and do nothing with it. In contrast, only 3% give unspent local currency to charity, whilst 12% use it to tip hotel staff**. Just under a third convert their holiday money, when they get home, while the same proportion will fritter it in the airport lounge and gift shops. Only 16% would spend it on gifts for loved ones.

Koko Sarkari, Chief Operating Officer of ICE, says, “Based on the national survey findings, we conducted a poll amongst our customers to find out how much foreign cash they are hoarding – 66% admitted to having over £50 worth of foreign currency at home**.”

“If exchange rates were favourable when the currency was first ordered and another trip’s on the cards, you can understand why you wouldn’t rush to convert leftover holiday money back into Sterling. But with almost half of us hoarding foreign cash, the hassle factor probably plays a big part in the decision not to convert it back. At ICE, we completely understand this and that’s why we launched our text based buy-back service, providing a quick quote for any currency we sell – whether the customer ordered it from us or not. This hassle-free service means customers will know exactly what they will get and all they need do is pop in to one of our branches and complete the transaction.

Customers should simply text SELL followed by the amount to 07786 207 053 and ICE will respond with a no obligation quote.
What do you do with your leftover holiday currency?

  • Nothing, save it for my next trip 49%
  • Convert it when I arrive home 32%
  • Spend it at the airport 32%
  • Spend it on drinks or a meal 18%
  • Buy gifts for family/friends 16%
  • Use it to tip staff 12%
  • Give it to charity 2.7%

*Source: ICE survey of 2,062 UK adults conducted by Consumer Intelligence 5-11 March 2014
**Sample of 248 ICE customers – September 2014

1 in 4 middleclass pensioners will work past 70

Nearly a quarter of middle class workers aged over 50 delaying retirement until they are at least seventy, according to new research from wealth managers Heartwood.



The research further reveals that:


·         Almost two thirds expect to enter semi-retirement

·         Four in ten (41%) are planning to remain in work for an average of five years longer than they had originally planned.

·         Yet only 31% of retired people said they had been semi-retired and on average they were in semi-retirement for less than two years prior to leaving work for good.

·         33% of higher-earning semi-retirees said they couldn’t afford to while 18% blamed the higher cost of living

·         20% said they needed to keep working in order to support their children and 18% cited the fall in the value of their pension


The new study by Heartwood1 suggests that semi-retirement among wealthier people is becoming an increasingly necessary and complex life stage, with nearly a quarter (24%) of middle class workers aged over 50 delaying retirement until they are at least seventy. Almost two thirds (63%) expect to enter semi-retirement and four in ten (41%) are planning to remain in work for an average of five years longer than they had originally planned. This is a growing trend, as in contrast only 31% of retired people said they had been semi-retired and on average they were in semi-retirement for less than two years prior to leaving work for good.


It is expected that this movement will continue over the coming years, enhanced by the announcement this week that the default retirement age in the UK has now been fully abolished, making it easier for people to put off full retirement for longer. 


For the majority, this is not driven by a love of their job but by concerns of their ability to fund their retirement. When asked why they were delaying full retirement, a third (33%) of higher-earning semi-retirees said they couldn’t afford to while 18% blamed the higher cost of living.  One in five (20%) said they needed to keep working in order to support their children and 18% cited the fall in the value of their pension.


Simon Lough, Chief Executive of Heartwood comments: “Longer periods of semi-retirement are increasingly becoming the norm amongst even wealthier people in their fifties and sixties. In many cases they are being faced with greater demands being placed on their pension pots, rises in the cost of living and unexpected financial commitments such as supporting their children for longer than they originally anticipated. 


“Even compared to a year ago the number of semi-retired people has grown by 43% and we would expect this trend to continue as economic pressures force people into having to generate additional income for longer, making it more important than ever to start planning as early as possible.”   


Heartwood offers retirement planning services, usually in parallel with investment management. These services cover the entirety of retirement planning and management from initial review and plan construction, through retirement and into ‘drawdown’2. Heartwood can provide advice on a range of pension scheme arrangements including SIPPs, SSASs, stakeholder and employer schemes, although the primary focus is on SIPP and SSAS arrangements.      


For further information on Heartwood, visit



The figures quoted in this release are based on an independent survey conducted by ICM. A total of 830 adults aged 50 and over were interviewed.


2 Drawdown is a form of pension arrangement that allows you to take your maximum tax free cash at the outset and defer your annuity purchase.


Heartwood provides integrated investment, tax and retirement planning solutions for ultra high net worth and high net worth individuals from its offices in London and the South East. Heartwood now manages and administers over £1.3 bn of funds for clients.




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US elderly have better mental function than those in UK


US elder have better cognitive function compared to their counterparts of the same age in the UK, according to a joint UK-US study.

The researchers said that mental function of the US elder was better despite the greater incidence of cardiovascular disease risk factors, which was managed better in the US with drugs.

They said: “Cognitive function is a key determinant of independence and quality of life among older adults. Compared to adults in England, US adults have a greater prevalence of cardiovascular risk factors and disease that may lead to poorer cognitive function.

“We compared cognitive performance of older adults in the US and England, and sought to identify sociodemographic and medical factors associated with differences in cognitive function between the two countries.”

The esearcher was carried out at Department of Internal Medicine, University of Michigan, Ann Arbor, MI, USA, Department of Public Health and Primary Care, University of Cambridge, Cambridge,UK; Epidemiology and Public Health, Peninsula Medical School, Exeter, UK; Institute for Social Research, University of Michigan, Ann Arbor, MI, USA Department of Epidemiology, University of Iowa, Iowa City, IA, USA and the Department of Psychiatry, University of Cambridge, Cambridge, UK.

They studied 13,566 ethnic white individuals over the age of 60, beginning in 2002.

They found that adults in the UK were economically poorer and suffered more from depression than the US adults, where more money is spent on healthcare and also managing symptoms associated with impaired cognitive function, such as high-blood pressure, with drugs. US adults were also better educated.

The researchers concluded: “We found that despite a higher prevalence of cardiovascular risks and cardiovascular disease among older US adults, they performed significantly better than their English counterparts on tests of memory, suggesting an advantage in cognitive health in the United States.

“While we were unable to confidently identify thecause or causes of this US advantage, higher levels of education and wealth, lower levels of depressive symptoms, and more aggressive treatment of cardiovascular risks
such as hypertension, may be important contributing factors. Given the growing number of older adults worldwide, future cross-national studies aimed at identifying the medical and social factors that might prevent or delay cognitive decline in older adultswould make important and valuable contributions to public health.

Read the full study at Full Paper