Panorama - Pensions Charges

MikeJones_2

Unfortunately this turned out to be yet another pension-bashing programme with the spotlight being shone this time on product providers.

Nonetheless, I must admit to being surprised at the level of charges stated for those companies named as having the worst fees.

However, what struck me about this was how simple it would be to rate funds based upon charges and to then produce tables that were available for the public to see. Isn’t this something that the FSA could very easily do?

Investing for retirement is not all about charges as many other factors such as performance and flexibility are important too.

The problem is that if the public continues to be drip fed bad news about pensions, they will react accordingly and the pensions crisis we are already in will only deepen.

I thought the programme could, and should, have tempered the bad with the good and ought to have cited examples of lower charging products that have performed well and met expectations.

It could equally have balanced the argument by showing some examples of higher charging funds which have done what they set out to do, if that was to charge more because the intention was to outperform the median with the charges reflecting the additional expertise and costs in attempting to do just that.

That's what I'd have called a more balanced programme.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

dunstonh

Its clear from a couple of new theads today from new posters to this section that the programme has done damage already and put the wrong ideas in their head.

I don't believe Panarama has any credibility any more. When I see the misinformation and inaccuracy on issues in my industry, I assume that similar levels of misreporting exist on every other subject they cover.

I see that money marketing have just published an article saying that Tom Mcphail and Maggie Craig had their quotes taken out of context.

http://www.moneymarketing.co.uk/1019690.article?cmpid=MME01&cmptype=newsletter

sandsy

MikeJones wrote: »

However, what struck me about this was how simple it would be to rate funds based upon charges and to then produce tables that were available for the public to see. Isn’t this something that the FSA could very easily do?

Such tables are already available through CFEB. They are available for a number of different products, here is the link for the pensions ones:

http://www.moneymadeclear.org.uk/tables/bespoke/Pensions

Loughton_Monkey

dunstonh wrote: »

I don't believe Panarama has any credibility any more. When I see the misinformation and inaccuracy on issues in my industry, I assume that similar levels of misreporting exist on every other subject they cover.

I see that money marketing have just published an article saying that Tom Mcphail and Maggie Craig had their quotes taken out of context.

I returned to UK in 2006 after 6 years abroad. One of the most striking observations I had was the unimaginable degree of "dumbing down" and 'lack of intelligence' demonstrated by the BBC. It probably happened gradually and I wouldn't have noticed it as much if I had stayed in UK.

I tend to feel it is partly an education issue (i.e. their researchers don't have enough O levels can't cut it any more), partly a strive for sensationalism (best left to the tabloids), and partly a complacency over the years where they have concentrated much more on re-distributing the wealth (salaries) within the BBC under the umbrella of a recession-proof income.

Oh well. Sadly we cannot escape the license fee.

MikeJones_2

Thanks sandsy,

I didn't even know the page you have kindly refered to exists (and I work in the pensions arena), so the point is how do the public find out?

I would also like to know how up-to-date the tables are given that posters to this forum have often criticised the FSA's annuity comparisons.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

sandsy

Mike, the tables are supposed to be updated everytime the provider changes their pricing assumptions. You can see the obvious weakness in that, I'm sure - especially when the price increases!

Another weakness in the tables is that they're supposed to allow for each provider's maximum commissions - but that number isn't stated anywhere and can obviously change from provider to provider. And some providers appear to be supplying product data which allow for an adviser charging option but it's not clear whether the figures include any adviser remuneration at all!

The FSA annuity tables are no longer owned by the FSA but by CFEB - they're part of the same suite of tables as the pension tables. CFEB are working with The Exchange to ensure that the tables contain real-time data going forward:

http://www.moneymarketing.co.uk/pensions/fsa-annuity-tables-update-by-2011/1015219.article

dunstonh

I would also like to know how up-to-date the tables are given that posters to this forum have often criticised the FSA's annuity comparisons.

Ok, I took that on and compared the tables with the real world using £200pm for someone aged 25 until age 65.

Now the FSA tables are strange as they dont focus on what you could get if you pay that money. Just if you picked the default fund and how much that would cost you if you paid via maximum commission. Nowhere does it say what 40 years of £200pm would pay either as income or what the final fund is. So, I cant go by figures. Just the order they appear as lowest cost.

The FSA tables Have Aegon PPP top followed by Scot Life PPP, Pru PPP, LV PPP and then Scot Wid SHP and FP SHP.

The real life figures have the following in order of lowest cost. Skandia Inveestment solutions, Cofunds Pension account, Aegon PPP, Aviva PPP, Scot Wid Ret account, Aviva Stakeholder.

MikeJones_2

About as useful to the public as a proverbial chocolate fireguard then...

And that's MoneyMadeClear is it?

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

leveller2911

Generally speaking it seems from the posts on the subject that the financial advisors and pension experts on here are a bit !!!!!! off with the lack of a clarity on the programme can anyone clarify why the Dutch seem to have a better system giving up to 50% higher returns?.

In lay-mans terms would be nice......

sandsy

There's a whole thread on that topic already:

https://forums.moneysavingexpert.com/discussion/2645481