Steve Webb writes in The Telegraph:
Almost 11 million of the adult population are not saving enough for retirement. So if millions of people are not going to get a nasty shock when they retire we need some big changes in the world of pensions. …So what is the truth about pension scheme charges, and what is the Government doing to make sure that people get maximum value from their hard-earned pensions savings?
He goes on to say that the Government has the power to cap charges, and undertakes to use them if consumers need that protection.
For most people, joining a workplace pension, with an employer contribution and tax relief on top remains one of the best things they can do with their money.
But I remain determined to make sure that every pound that they put aside is turned into the maximum possible amount of pension.
And if further measures are needed to clamp down on charges, then we will not hesitate to take them.
You can read the full article here.
* Mary Reid is a contributing editor on Lib Dem Voice. She was a councillor in Kingston upon Thames, where she is still very active with the local party, and is the Hon President of Kingston Lib Dems.
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5 Comments
One of the reasons I am not saving enough is that there is not enough coming in.
I am also trying to do my patriotic and social bit to reduce the effect of the recession, by consuming now rather than later.
So please do continue with the good work – the little I will have when I finally get to retire will be very hard to live on.
I always laugh when a politicians says I will not hesitate to act. It basically means he is hestiating and doesn’t know what to do.
There seems to be something wrong with the title of this piece, the election was a couple of years back and there hasn’t been any action on charges yet. Is this because the Tories are holding us back, rendering us blocked if not hesitant?
There is a often-quoted statistic that if you had bought £100 of stock in Warren Buffett’s Berkshire Hathaway back when it was started then – with dividend reinvestment – you would now have an asset worth £300,000. If a pension fund provider had made the same investment for you, then as a result of their charges your asset would now only be worth £30,000.
Of course you can go down the SIPP route, but SIPPs are relatively complex products that require significant financial sophistication from the investor.
The entire pensions industry is essentially a cartel. Cartels are supposed to be illegal. You don’t need any extra legislation. You just need to use the powers that are at your discretion.
The State must not abdicate responsibility for care of the elderly: life is too uncertain to rely upon private providers. Admittedly a pension scheme entered into on leaving school and maturing when too old to carry on working is a convenient solution to the problems besetting the DWP but this is an unworkable “one size fits all” that assumes that people have a job for life and the stock market on which pension funds are invested remains stable. It does not take into account what Shakespeare referred to as “the slings and arrows of outrageous fortune” e.g. redundancy, unemployment, incapacity through sickness or injury and the self employed who lose out when they hit a bad patch or someone who overextends their commitments and defaults on the contributions. Also it overlooks the other side of the coin : the Pension Provider can fail for a variety of reasons e.g. war or recession when the investment/stock market crashes – unlikely perhaps but whoever thought ten years ago that banks would fail?