This is a personal piece about an unfortunate financial decision, which may serve as a warning to others.

I moved to Israel after graduating from university in 2004, and returned to the United Kingdom quite recently. This week, I began work as Citywire’s Retirement Planning Correspondent.

In Israel, I worked for about three years at the online English-language edition of a national newspaper, Haaretz. The paper provided me with a generous pension scheme, under which we both contributed to a pot.

When I decided to head back to Britain, aged 28, I also chose to take some time out and visit the United States – a trip I funded by raiding my pension.

It is only now that I realise the enormity of my decision, as I get to grips with the minefield that is retirement planning.

I could have left the pension over there, growing nicely as the years go by; instead I squandered both current savings and future gains.

And because I tapped the pension before retirement, I had to pay a hefty wad of the cash to the Israeli taxman, about 30%.

In the UK, it’s not usually possible to get anything out of your pension before you turn 55. And you can usually only take a quarter in cash when you retire, with the remainder being paid as part of a pension scheme over the rest of your life.

Interestingly, the Treasury is expected to allow early access to a 25% tax free cash lump sum from pension funds, although it will impose strict conditions on what it can be used for.

I did have a great time in America (where I began an epic romance with frozen yoghurt), and would never suggest people refrain from travelling in the name of financial prudence.

But I do wish that I had paid for the visit by some other method – a bank loan, perhaps. Because no amount of froyo is worth a retirement beset by fears over pension cuts and the erosion of savings, which we are all likely to face and which my Israeli pension could have helped offset 40 years from now.

Max- you don't do that when you are 28. Also your Israeli scheme is different. We are talking about the tax free allowance, may be people need that money in middle age for mortgage, children etc!!

But fear not, I started mine just on 40, and but for the Brown skid mark I would have had a half decent pension.......

Max.
At least you have not been screwed by the uk pensions industry . Equitable life - totally unequitable - Sun Alliance - deferred annuity with profit funds- a complete disaster for many years . Fund of fund options doubling up the commissions and many other insurance company/ brokers hidden plays.
Don't be too sure the 25% tax free will continue much longer . Some grubby politician will cancel this option soon . Annuity rates are derisory . Do pension holders understand that their hard saved funds are supporting UK gilts , giving a 3% yield - not by choice but by government decree .
If you must advise people to invest in pensions they should,if they have the opportunity, set up their own SIPP and manage the funds themselves after taking advice . The Sipp owners have the option to go into drawdown when they retire . If they have children and wish to leave them a pensions nest egg then make sure they die before they are 75.( otherwise they will currently have to buy an annuity and give the pension nest egg away! ]
As for the state pension you have to laugh. The basic of about. £90 per week, less tax, ,will just about run a modest car !
With hindsight I would have bought more property and invested funds in ISA and the like . No tax relief but at least the capital would be mine to play with .

Have you made the right job choice ?

Paul your decision seems interesting, has any one done acturial sums to compare reasonable investments in equity against investing in pensions through a normal route assuming we died at 70 yrs? and investing for 40yrs!