MSE News: 'Murky' pension practices to be tackled

Andy_L

DiggerUK wrote: »

'the price you pay' never emphasises the fees and charges from management and finacial advisors. Both of whom know how much 'free money' is available to point in their direction.

Those shopping around for what to do with their pension pot now did not have the option of ISA's when starting out.
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ISAs & their predecessors have been around since 1986. Anybody retiring now has far more options (and far lower charges) than they did 25+ years ago. Including the option to not use annuities at all.

Annuities are worse than they used to be because people are having the temerity to not die as early & lower guilt rates

DiggerUK

dunstonh wrote: »

Please provide an example of this fleecing........
And what options and competition doesnt already exist?...........

The disparity in the rates for annuities is a regular story in the media, and you know the stories are true.
Go and search online for best rates, and the first thing you see is 'come with us, our rates are up to 48% better than other annuity providers'...... now we all know a pinch of salt is needed with claims like that, but 40% difference seems the norm when put alongside media reports. If that isn't fleecing I don't know what is.

As an aside, remind us of the claims you have made about how you have improved on providers claims.....what's the best offer you have obtained for a client of yours. No answer expected.

The choice that does not exist, is to make the options for a pension pot much wider. At the moment the pension pot has to go to those who know the pensioner has no choice, that means they know they have a captive market, and fleece accordingly.
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Freecall

DiggerUK wrote: »

As to claiming that those given control of their pension pot would squander it, after saving in to it for most of their working lives....

I am all for empowering people to manage their own affairs but I expect that many more fail to look after their long term interests than you think.

You only have to look at how many come on here to find out how to cash in their pensions in early middle age. So many that there is even a sticky on it.

DiggerUK

Freecall wrote: »

I am all for empowering people to manage their own affairs but I expect that many more fail to look after their long term interests than you think. ......

The scandal in this day and age, is that many struggle to put anything by for retirement. And you say that most will squander it....no they won't.
Most asking how to cash in early just want the option of total control of what they regard as their money, not because they are squanderers.
To label them as such is a throw away insult because you have no idea why they want their money.

You will always have difficulty stopping fools being fools, but don't punish the wise by treating them as cannon fodder for the usual vultures in the pension industry.
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Freecall

DiggerUK wrote: »

And you say that most will squander it

I didn't say that or anything like it.

DiggerUK

Freecall wrote: »

I didn't say that or anything like it.

Post 14 is crystal clear in what you said, and what you implied, in your response to my quote.
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dunstonh

The disparity in the rates for annuities is a regular story in the media, and you know the stories are true.

That does not make it wrong. The same disparity exists in most retail markets.

Go and search online for best rates, and the first thing you see is 'come with us, our rates are up to 48% better than other annuity providers'...... now we all know a pinch of salt is needed with claims like that, but 40% difference seems the norm when put alongside media reports. If that isn't fleecing I don't know what is.

Those sorts of claims, as you say, should be taken with a pinch of salt. That is common marketing used in many retail markets. However, that said, if it gets people to act then that cannot be a bad thing.

The choice that does not exist, is to make the options for a pension pot much wider. At the moment the pension pot has to go to those who know the pensioner has no choice, that means they know they have a captive market, and fleece accordingly.

The choice has never been wider. You can run your pension income with whole of market investment options. You can run it with fixed term annuities and buy new rates each time the fixed rate expires. You can buy lifetime guarantees. Choice is strong.

There is no fleecing. There is an issue of legacy positions though going back to the days when pension providers were required by law to offer an in-house annuity. Most providers cannot afford to do so and without volume there is not the profitability to enter the market. So, they were forced to offer something they didnt want to offer and it is no surprise the pricing wasnt great. Now that they no longer need to offer in-house annuities, you are finding providers are offering limited panels in house or have tied up with a provider that offers improved terms over their own. Still not as good typically as an IFA but it doesnt need to be. No retail market has any legislation that says a retailer has to offer best price.

gadgetmind

DiggerUK wrote: »

you are denied the chance to take all your pension as a lump sum.

I suggest you google for "Flexible Drawdown".

gadgetmind

DiggerUK wrote: »

'the price you pay' never emphasises the fees and charges from management and finacial advisors.

So, don't use fund managers and don't use a financial advisor.

TrickyDicky101

bmm78 wrote: »

Utter rubbish from Webb, proposing "changes" that already exist.

A cynic might suggest that he is looking to score some cheap political points. Either that, or we have a pensions minister who doesn't understand the rules applying to pensions.

Fixed Term "annuities" (written under drawdown rules) allow people to take an income without committing to an annuity. You can buy an annuity at any time or put the maturity sum into another Fixed Term product.

There is also nothing in HMRC rules preventing temporary annuities being set under annuity rules. There is a "Third Way" product out there that broadly works in this way.

The problem with these products is that few people are aware of them, and the figures are often not very competitive (probably because of the lack of volume in the market).

If the government was serious about making things better for people, they would make whole of market shopping around mandatory and reform the Money Advice Service to assist with the flow of information.

Totally agree. I don't think the minister understands how annuities work. Income drawdown is an effective method of facilitating a 'flexible' annuity.