Wendy Love

Research student

Wendy Love is affiliated with The Open University's Department of Accounting and Finance.

You can email Wendy Love directly; but for media enquiries please contact a member of The Open University's Media Relations team.

Biography

Wendy is a Fellow of the Association of Chartered Certified Accountants with twenty years’ international experience in the Charity Sector as Financial Director and CEO. A problem solver by nature, she has been advisor to organisations and individuals helping to find solutions to financial problems. She has fifteen years’ experience as course director and senior lecturer, to undergraduates of Business and Finance, and professional accountancy students on ACCA, CIMA and AAT courses. This with around five years’ experience tutoring adult numeracy has prepared her well for her current research with the Open University.

A dedicated Open University student who obtained her first degree with the OU in 1976, a second in 1995 and an OU MBA in 1998. Who, in the meantime, obtained a PGCE from London in Integrated Science and Mathematics and qualified with the ACCA. She has now returned to the Open University to conduct her research into areas of Financial Capability. Her goal is to try to help alleviate the unnecessary financial distress that she has seen in her areas of work. Having completed an OU Masters in Research, Business and Management (MRes BM) in 2017 she is now enrolled on a PhD researching the impact of Financial Capability in older UK adults.

Current research

The Impact of Choice on the Decumulation Strategies of Members of Occupational and Personal Pension Schemes in the UK

On 6th April 2015 the UK government announced major reforms to pension and taxation legislation, one of which was freedom of choice to the individual. This freedom gave members of UK occupational and personal pension schemes, aged 55 years and over, the right to make their own choices regarding their pension savings and withdrew the earlier punitive tax measures, together with the requirement to purchase an annuity. Considering the concerns previously raised by the Financial Services Authority over the inability of the UK adult population to demonstrate sufficient skills in financial capability (HM Treasury 2007) and the Money Advice Service report on the failure of the government’s financial capability implementation strategy (MAS 2015) this thesis challenges this policy measure.

The increasing movement of Defined Benefit pension plans to Defined Contribution plans has transferred the investment risk to the individual during the pension accumulation phase. These new pension freedoms, it is claimed, exacerbate the risks to which an individual is exposed, adding decumulation risk and longevity risk as well as escalating the investment risks. All this at a time when an individual’s executive function could be dwindling at an increasing rate, which is a further concern as the state pension age for both men and women has been raised to 66 years, with legislation being amended to accelerate its introduction. It is claimed that, the enforcement of this legislation requires individuals in the UK to make life-impacting financial decisions without being fully informed or supported by adequate expertise.

This thesis invokes selected theories of Choice and Information Processing to examine both: 1) the financial capability of individuals; and 2) the impact of the new freedom to choose, on the financial well-being of those over 55 years who have decided to access their pension savings. The work fills a gap in the literature on the complexity of financial capability and provides evidence informing the question of whether or not an optimal financial outcome is always a satisfactory outcome for an individual’s well-being, happiness and quality of remaining life.

The main data source used is the English Longitudinal Study on Ageing (ELSA), which is a large-scale longitudinal, biennial panel study of people aged 50 and over and their partners, living in private households in England, which commenced in 2002. The original sample of 12,100 was drawn from households that had previously responded to the Health Survey for England (HSE) between 1998 and 2001. The sample has been refreshed on four subsequent occasions.

Using ELSA’s comprehensive: economic data, which includes income, wealth, pensions, employment, consumption and expectations; demographics data at the household and individual level; and cognitive assessments, this thesis will analyse whether or not over 55-year olds have sufficient financial capacity to make informed choices with pension savings, how this has affected their financial well-being and the extent to which deteriorating executive function adversely impacts their choices.

Supervisors