BRITISH PENSIONS ARE CUT IN HALF
Tuesday 3 August 2010
Over 5 years ago we had the back door keys to the fund managers, insurance and pension providers. What did we find? Take a guess.
Today, the cost of pensions has hit the headlines. Front page news in the Daily Express, British pensions are cut in half. In the Telegraph, Charges and fees cutting 50 per cent from British savers' pension pots and the Daily Mail, Hidden costs halve the value of our pensions.
According to the telegraph “A 25-year-old worker putting £200 a month into the HSBC World Selection Personal Pension for 40 years and receiving typical returns would be charged a total of £248,650, according to industry figures.
The worker would be left with only £248,453, according to the Financial Services Authority, meaning that just over half the pension pot would be absorbed by costs.“
How does that make you feel?
Before making comment, there was another article in Money Marketing headed 'Barclays has made me a poor pensioner'
In this article, around 80 former Barclays investors lobbied MPs for help to recover hundreds of thousands of pounds they invested in the Aviva global balanced income fund. One such investor was....
Campbell, wearing the
“Barclays eat wealth” hat
"Steven Campbell is a retired film director who invested £250,000 in the Aviva fund in 2007 following advice from a Barclays adviser.
Campbell says Barclays contacted him offering advice after he deposited £350,000 from the sale of his London house. He told the bank he wanted an income to look after his daughter, who was nine years old at the time.
He said: “I had no idea about money, I just trusted Barclays to do the right thing but it turns out I would have been better off putting the money under my mattress.”
Campbell has left his money in the Aviva fund and it is now worth just £150,000.
He said: “Barclays’ treatment of its clients is appalling, there has been no customer service at all.”
Such an article has no reference to pensions, but it does illustrate what makes people angry.
Losing money today makes people upset. Quite rightly so. I really can't imagine anyone who would not take action. Yet the future losses in pensions is quite possibly greater... but it does not feel like a loss. There is no change to your life today. So the emotions and desire for action are somewhat less vociferous.
Even so, these headlines will prompt some people to ask their advisers or providers for reassurance. No doubt the products providers and their salesman will use a multitude of defence arguments…"its not about cost but performance"..."Our charges are extremely low compared to the market." Of course one would expect these responses. But are they actually valid or could, David Pitt-Watson, senior executive at Hermes Fund Managers, who is mentioned in these articles, perhaps be right? Who do you believe?
I read with interest another comment made which has clarity from my eyes because of my knowledge and experience, but whether it helps the reader....
" Over on this side are clients, they want a return, some more than others. And here, over on this side we have the markets, that give a return, over time. Some more than others, with an associated risk premium. All good so far.
Trouble is, in the middle, between the two, is this great big wodge of GOO. And if you listen very carefully you can hear this sucking noise. That's the sound of charges being extracted from the system by the investment industry, layer upon layer of charges, funds investing in funds investing in funds, with the end result that the client over here, doesn't get the return from the markets over there."
Sounds as if this chap perhaps knows more than most!
We all need confidence in pension funds because they impact on our future, but confidence comes from understanding whether people like David Pitt-Watson have valid comments that need investigation. I really think this issue needs investors to take action...otherwise your pension fund could be cut in half.
Some of the simplest proverbs are the best.
You can lead a horse to water, but cannot force him to drink.
It's your choice.
posted by Murray Round Wealth Management @ 09:53,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
Welcome to our Blog
Our Blog focuses on the three Ts...truth, transparency and trust. The world of investment management is fraught with self interested parties keen to sell investment products but wrapped up as 'advice'. Only with totally transparency, can investors make informed and successful decisions. We have included various categories for simpler navigation, alternatively search our Blog using key words you think are relevant. We hope you find something of interest to you.
Contact Us
We welcome your enquiry to us. Simply click on Contact Us' link at the top of the page. You may also email us at service@murrayround.co.uk or telephone 01743 248108.
Visit us again!
