WONGA – The context of the decision


The decision of the FCA to enforce a section 166 order on Wonga demonstrates a new intent to get to grips with bad behaviour in the financial community which has got to be good news for us in pensions.

I was at a meeting yesterday with a group of academics who were wondering why we still don’t know how much we pay for our pensions. I gave them the answer, because we don’t require an answer. Let’s hope as a result of the work being done by the FCA and DWP on transparency of charges, we will finally get some numbers on fees and costs.

On a less optimistic note, the information that we can give the market through research is of no use if those we provide the research to, have no inclination to use it.

Many of those who took out a Wonga loan had access to better forms of finance and information was available through CABs, MAS and the internet which could have saved them from themselves.

But the context of the decision these people took prevented good decision making.

That is not me being liberal and absolving people from the consequences of their own decisions, it is simply a fact that people take bad decisions out of ignorance, laziness or panic which they would not have taken had they been in a better place.

For all the research on decision-making that is going on today, I see very little on the context of the decision.

I know that I take my best financial decisions when I am alert and at work. If I put myself in a work context, I will behave more professionally and with better effect than if I  do the work in the evening with a glass of wine in my hand.

This is of critical importance to those considering the Guidance Guarantee. I have yet to see any guidance on “context” for decision making but – to give this a first stab – I can offer fivc simple do’s and dont’s when taking a decision on your financial future relating to your pension pot


Take time on your decision

Ensure you consider  those who are affected by your decision, including family, debtors and employers

Take as much advice as you possibly can

Use the internet – especially sites such as money saving expert – where you can ask questions.

Keep a smile on your face



Rush your decision

Sign anything or press a irretrievable “send” buttons when you are tired , drunk or feeling depressed.

Take decisions on your own


Do anything that you suspect may be illegal.


I don’t know if any of this can be regarded as financial advice but I suspect that the majority of the decisions taken by those who took out Wonga loans , made decisions in the wrong context.

One of the reasons we advocate financial education at work is that it encourages better decision making.

Pensions are boring- work is boring – there is a natural synergy there.

“Context” is also a key reason for companies to introduce workplace saving into credit unions. See previous blog.



About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to WONGA – The context of the decision

  1. Henry
    I don’t really read much pensions stuff now as I’m drawing one. You’re right – they are boring as is work! But once again the Wonga episode illustrates the crying need for people to be educated in the basic mechanics of financial awareness. Not just children learning about the magic of compounding (and it is magic) and politicians fiddling around with the school syllabus to kid themselves they’ve ticked the box marked ‘Financial Education’. Once again its soap box time: financial education = money savviness = need for culture change in our society. ‘The message will continue until performance improves’ should be the mantra of every pension manager, financial adviser, Pensions Minister, Secretary of State for Education, Prime Minister, parent, teacher, CAB, lawyer and anyone else who is supposed to have a brain and be in a position of leadership.

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