It takes a lot to make me really angry

The FCA don’t appear to do ‘joined up’ thinking. Today’s Press reports has them ‘back pedalling’ with great energy. With a nett 2.5 billion reported as having been wiped from pension providers share values, it isn’t surprising.

The FCA say that this is not the start of a witch hunt. They will not be pursuing individual cases of pension scamming. However, if the temptation is to read between the lines, one is left with the suspicion that there is more going on than any of us know.

Re 47
Alan,
Has there been a noticeable difference between what your original investment forecasts were and what you’ve actually got?

To be honest I don’t remember what the original forecasts were. Although I have received annual updates which don’t
seem to have changed much over the last few years.
I never invested huge amounts, but I did start when I was relatively young. Obviously taking the money now, meant a
considerably smaller sum, than if I had waited another 10years.

Re 47
Alan,
Has there been a noticeable difference between what your original investment forecasts were and what you’ve actually got?

I’ve just missed out on this legislation.
I took my 25% lump sum from my private pension back in November, and now have a small annuity.

I’m not sure though, what I would have done differently if I’d had the chance.
Maybe a smaller lump sum and a bigger annuity ? Which may have meant losing some in Tax, when my state pension starts.

It sure looks as if Moggy has stirred a ‘hornet’s nest’ !

It is announced that the FCA are to investigate the circumstance in which Pensions, endowments, investment bonds and life insurances were sold between the 1970s and 2000.

The investigation is centered upon the size of the yield on maturity of these investments. On a personal level, this covers a 20 year savings and investment plan held by myself. The announcement of the FCA investigation started a fall in provider share values of £7 billion. Is there something to hide?

An important, perhaps even more important development is the capping of what is referred to as ‘rip-off’ pension and investment charges. This is to be capped at .75% (three quarters of one percent) annually. Although it doesn’t say so, I assume that this means .75% of the annual amount of savings or investment.

It was said that ‘rip-off’ investment charges could remove about one third of the end value of the investment.

The news from the FCA surely means that these Forums are read widely, especially in Whitehall, and the advice and comments they contain do shape Govt. thinking.

Edgar. Yep, Your dead right, I get a State Pension, and the Police Payment, and I still pay Income Tax, just a few weeks ago HMCR sent me a letter with a new Tax Code, which means I will be paying more tax this next year. I wish I could pay them with a pint of blood every month instead. Ooops, shouldn’t have said that, they may may take me up on it. It’s one of the few things left, apart from the air we breathe, they cannot Tax.
Jim.
Lincoln .7

Now, even if you live to be 120 you’ll get that £400 a month.

I’ve been hoping that someone (preferably a pensioner, like me,) would add a little more clarification, but it looks as though it’ll have to be me. You won’t get £400, you’ll get £320 (if you’re lucky.)
At retirement age, National Insurance contributions cease, but Income Tax doesn’t; the State Pension cannot be taxed (being an old cynic, I have a deep suspicion that this enables politicians to call their pension a State Pension, so that they avoid paying any tax on it.)
Private pensions have no such provision, but the amount is actually added to the state’s payment, and tax is calculated on the whole amount, meaning that (if you’ve listened to the politicians, and provided for your retirement) you do pay tax on the State Pension, though the money, itself, is deducted from your private pension.
The tax threshold, before you start to pay tax, is higher than when you’re working, but not above the amount you get from the state, which is probably why some say “Sod it,” and don’t bother.
Since my retirement, the threshold was raised, annually, so that it neared the state pension amount, but that was stopped last year, so that this year I receive a whopping increase of £5 weekly, out of which I immediately lose £1, and, with a rent increase of £5 per week………
And, before our Communist sympathiser jumps in, I haven’t forgotten that it was Brown’s bunch that did away with the 10% tax band, ensuring that the lower-paid lost more, in %age terms, than the rich bunch, and they claim to be the party of the working-class. :highly_amused:

Moggy,
Sounds like you know what you are doing AND have a little to spare on some gambles which is ok IF you are in your position BUT the majority aren’t .I really fear we are going to see alot of scams, losses and upset people who have saved all their lives.
I know ,we should all take responsibility but the saying about a fool and his money.

So anybody got any sure-fire investment to outperform an annuity?

Almost any investment outperforms an annuity for one’s beneficiaries as it will form part of your estate, something an annuity can’t.

Rental property is probably your best and safest bet for income until you pass on

I’m slowly transferring all my fund by drawdown into a self-selected equities ISA. I probably won’t beat the annuity rate, but I have fun trying to. And yes, I do have some funds in Frontier

Moggy

Something to keep the nerds amongst us busy while waiting for the new version of Elite – there is a faithful re-creation of the original already available that will get them back up to speed and killing Thargoids. Free, open-source, and just as addictive as you remember…

http://www.oolite.org/ 😀

So anybody got any sure-fire investment to outperform an annuity?

Agricultural land has been a winner recently according to a friend of mine; doubling in value (I think) in about ten years.

This whole pension situation is becoming more and more of a conundrum, judging by the posts on here very few if any are keen to hand control to a government of any flavour, yet most appear to have very low regard of the private financial services world, even if a not for profit organisation was set up to handle pension would that organisation have any concern about getting the best return on funds?

I’m not going to even pretend that I have the answer, but people in general are going to need to be even more careful in their choice of pension provider, certainly in my own case what appeared to be a more than adequate pension when I retired, is certainly vastly reduced in value now, not pleading poverty by the way (yet) just a simple statement.

But the point is people are currently being stung. The annuity system is not right for everybody, yet they are forced to participate.

Moggy

A quick google seems to show the bonds are still around.
I still have a really bad feeling about the amount of people who are going to be stung by less than honest people because they don’t understand.

Re 32

CD
On that particular point of corporate honesty, there isn’t much the prospective investor can do, apart from shoppiing around for the best possible deal and ALWAYS taking time to read the small print so that you know exactly what you’re buying and the scale of, preferably, fixed charges that you will be paying.

The other point to be considered is whether or not the service provider will be in business for the full term of your investment. Takeovers, bankruptcies, poor management, criminal activity etc. can mean your funds disappearing into thin air. I wouldn’t be too keen to rely on the actions of the various financial watchdogs to help out. They might, then again they might not and then again it might all take an awful long time to resolve.

It was possible at one time and for all I know might still be obtainable, to buy from ones bank what is known as a Performance Bond, the cost for this – a one off payment – usually being a fraction of one percent of the value of the investment. This was, in effecr, an insurance against the failure of the investment at any time during its term.

The Bond had an added advantage. If a bank or other lending facility declined the business it was generally because they considered that the risk of failure with the service provider in question was reasonably high. In effect another line of defence for the investor. If the investment failed, the Bond could be called in and the investor compensated at the point of maximum loss.

It doesn’t make me angy. It makes me frustratingly amused.
I’m a working class boy. My mum was a seamstress (remembers V1’s as a child) and then a housewife. My father served in the Royal Navy then becoming a lorry drive.
I left school in 84 and worked solidly up to 2009. Work has been a bit scratchy but I’m still working.

My parents told me to work hard and save. At 46 I have paid off my (modest) mortgage. I still have (some) savings and I’m still working.
What frustrates me is the government and banks have been `advising` me. Yet my original endowment was worthless and since 2009 my salary and savings have been eroded.
If there is one thing I have learnt it is that the only person who knows how to effectively manage my finances is me!
I don’t know what I will do when I retire. But if I want to blow it (hell, maybe blow it and live off the state) that’s my business.
That’s if I ever get to retire. My father died at 68.

What’s more important is that THEY ARE DOING A NEW VERSION OF ELITE!

“A bunch of millionaire, Eaton educated Tories putting out an advert saying”

Waco – just for the sake of good order would you list (since you used the term bunch there must be several) the Eaton (sic) educated millionaire members of the government? Thank you.

In my opinion his actions will only serve in increasing the ridiculous house price inflation that is presently infecting the country, greatly to its detriment. Have we not learned anything from the previous house price crashes?

Ridiculous? But how do you control house price inflation effectively?

You could put up interest rates but wouldn’t that hurt working people who are struggling to buy a house?

Often we are told on this forum that working people need to be paid a ‘decent living wage’ but if wages increased so that many more people could afford the house that they wanted wouldn’t that also fuel house price inflation?

If there were more houses fundamental economics says that that should bring the price down; so the government could ‘allow’ more houses to be built. But these houses would need to be built commercially and the fact that house builders seem reluctant to build houses suggests, to me, that there is a limit to the number of people who can afford these commercially new-built houses.

Of course, the government could build more houses, council houses, and rent them at affordable rates, rates that would probably not be commercial. But if these rents were not commercial would they be loss-making? Building more council houses may reduce the housing-benefit burden; why pay housing-benefit to commercial landlords so they can profit when the money could be kept ‘in-house’?

I would have no problem with this so long as the whole thing was carefully costed so that it was sustainable but that raises another issue really…

…is it the job of government to provide whatever people cannot afford on the commercial market?

And how far do you take this provision of affordable housing; until there are no waiting lists? There will surely come a point where the whole provision of council houses is just not affordable because it relies on taxation and the more you tax people the fewer of them are able to afford commercial house prices.

But how would a Chancellor address any aspect of a commercial pension company? I’m not saying that it shouldn’t be attempted but any attempt to restrict fees, profits or bonuses is just going to drive pension companies and talented people out of the market isn’t it?

Just for a minute let us imagine that everyone who works in finance isn’t utterly dishonest and is robbing-us-blind; could the fees actually reflect the actual cost of providing the service? Annuities must be especially difficult to cost as by their very nature you are predicting decades into the future.

I suppose what it boils down to is whether we trust commercial competition to drive down costs to give the consumer the best possible deal (but also to ensure that the companies involved stay in business).

One solution could be for the government to run its own pension and annuity department; it could be set up to make no profit (but no loss) and it would only pay staff a reasonable fixed salary with no bonuses. Would that be a solution? Would that government department be any less likely to make poor investments or be guaranteed not to lose pots of money?

Ahhh Moggy….if in doubt resort to the crass sarcasm of a spelling error…I expected nothing else.

When it comes to geography I have only visited 81 countries so perhaps this is an area I am weak on (list available if required).

The pensions and annuity industry was, is, poisonous and needed addressing. The fees that are charged by these people, irrespective of the funds success or failure is nothing short of scandalous.

The performance of many of the fund managers involved mirrors that of our “banking friends”. Making poor investments, loosing pots of other people’s money but still receiving phenomenal salaries and bonuses.
This aspect of the pensions and annuity business needed sorting out and should have been addressed by the chancellor.

In my opinion his actions will only serve in increasing the ridiculous house price inflation that is presently infecting the country, greatly to its detriment. Have we not learned anything from the previous house price crashes?

Finally…and I have said it many times on these and other forums. May god protect us from Ed Balls becoming the next chancellor……..He scares the sh@ts out of me.