Martin Lewis Money Show - Pensions (ITV, 18/02/2021)

hugheskevi

Show available on ITV player. Broadcast Thursday 18/02/2021 at 2030.

Interesting to see a show about pensions in a prime-time TV slot on a major channel. I thought a live show is just not the place for this topic - a lot of the answers need careful phrasing as otherwise they can easily be misleading or even just wrong. The whole show was only 22 minutes long, and not all of that was pensions but they tried to cover a lot of ground.

Personally I thought many watching would have very little more understanding of pensions having watched it, and could very easily end up more confused. Having said that, getting any balance between being engaging, interesting, accurate and comprehensive is extremely challenging so whilst it is easy to point out the dubious bits, I'm not saying I could do any better

The main things I thought were questionable were:

1. A 35 year old self-employed driving instructor asking what would be best type of pension is told Aviva and Standard Life are the big Stakeholder pension providers. It is also repeatedly implied personal pensions are set up through advisers and that for bigger contributions you probably want to pay for an adviser. Suggested to have a Stakeholder for contributions below £3,600 p/a and after that get advice and invest in "proper funds." A SIPP is described as being able to control your investments (with implication you don't do that in Stakeholder or personal pension)
2. "Should we start an AVC through our company pension?" to which the expert answers "Yes, definitely, but also look at purchasing Added Years." Martin said he assumed her employer would be able to do the calculations to determine whether she would be better to do an AVC or pay for Added Years later on, to which the expert said "Absolutely"
3. Asked whether a Self-Assessment form has to be completed to get tax relief on a lump sum contribution to a pension or can HMRC be informed as a one-off, a viewer is told that higher rate relief has to be claimed through Self-Assessment.
4. Multiple references to minimum pension age of 55, no mention of increase to 57 in 2028, despite this being included alongside urging to start pension saving when young
5. Confusing decumulation secton, eg saying "Whether you take all the money from your pension or take it in bits, you can't say you want the 25% tax-free now and I'll take the rest later" Martin is talking about UFPLS at this stage, but the point about taking it all or in bits is extremely confusing given drawdown does exactly what he said you can't do (he does go on to drawdown next, but if I had only a basic knowledge of pensions I would have been totally confused).
   

And some minor things:

1. Starting the show off saying that to get two-thirds of final salary you should be contributing a % into a pension which is half your age when you start saving and that needs to be saved into a pension for the rest of your life (presumably working life, but it was repeatedly said rest of life).
   
2. State Pension shown as £134.25 per week, which is the full basic state pension amount for people reaching State Pension age before 2016 - this doesn't really have any relevance in the context of people saving for the future, but there was no explanation given, just the figure.
   
3. When asked whether investing in property or a pension is better, the answer says that pension is a tax wrapper (noting you cannot buy your own house in your pension) and that you can invest in property within a pension (so not strictly wrong, but misleading without more description, given the question is clearly a BTL vs pension question).
4. There are two different types of Company Pension - "Final Salary" and "Money Purchase" - odd not to show Career Average given this is now the overwhelmingly dominant form of Defined Benefit pension in UK (or at least, will be from 1 April 2022 when public sector members affected by McCloud go back to Career Average)
5. For every £100 of earnings, people take home £80 in their pocket (no mention of National Insurance)
6. Minimum AE contributions stated as 8% (no mention of banded earnings)

dunstonh

A 35 year old self-employed driving instructor asking what would be best type of pension is told Aviva and Standard Life are the big Stakeholder pension providers

Is the SL stakeholder still available?  The Aviva one is effectively hidden, if it still is.  Apart from niche cases, stakeholders are largely obsolete.

 It is also repeatedly implied personal pensions are set up through advisers and that for bigger contributions you probably want to pay for an adviser. 

So, out-of-date by 8 years.

Suggested to have a Stakeholder for contributions below £3,600 p/a and after that get advice and invest in "proper funds." A SIPP is described as being able to control your investments (with implication you don't do that in Stakeholder or personal pension)

Again, out of date.  Master trust schemes/robo have pretty much taken over the small level contributions.

LHW99

I didn't watch the programme, but was it actually made in 2020 / 21? They seem to be showing many more increasingly old repeats at the moment (watched a documentary yesterday and found out it was originally made in 2009)

[Deleted User]

LHW99 said:

I didn't watch the programme, but was it actually made in 2020 / 21? They seem to be showing many more increasingly old repeats at the moment (watched a documentary yesterday and found out it was originally made in 2009)

This is series 10 - so initial broadcast not a repeat

Pollycat

LHW99 said:

I didn't watch the programme, but was it actually made in 2020 / 21? They seem to be showing many more increasingly old repeats at the moment (watched a documentary yesterday and found out it was originally made in 2009)

It's not showing as a repeat (R) in the TV mag.

And it says 'have up-to-date information on how lockdown is affecting finances and consumer rights'

It may have been cobbled together with new segments and old though.

Here's what ML said on Twitter:

Martin Lewis

@MartinSLewis

·

13h

I'm on my way home from

@itvMLshow

. Hope tonight's pension experiment worked. Tried to pack a lot on to that 22m 20s. If nothing else the key is it can get free guidance if you need it. Hope you enjoyed the show.

Silvertabby

Haven't watched these programmes since Martin assured a retired couple that he could definitely save them some money.

Turned out he was referring to the transferable tax allowance, on the assumption that in the case of all retired couples one of them (ie, the wife) doesn't use all of her personal tax allowance.

I'm sure that we are not the only pensioner couple who both pay tax!

Albermarle

Maybe the best advice would have been a link to this forum 

Dazed_and_C0nfused

Albermarle said:

Maybe the best advice would have been a link to this forum 

Like it 

eskbanker

Albermarle said:

Maybe the best advice would have been a link to this forum 

As long as the advice was to head here to search and read, and to post only if necessary!  The last thing this board needs is another few hundred thousand new threads asking about transferring DB pensions or how to interpret SP forecasts....

Malthusian

I'm going to play devil's advocate and say that, considering the complexity of the subject, if those were the worst errors the programme made, they probably did a decent job.

For your 35 year old self employed driving instructor with no pension - an ITV programme's target audience - the correct guidance is to just open some kind of pension, any pension. If they open a pension that is needlessly expensive or has a poor fund selection, nae bother, as long as they have money going into it they can always fix that later.

I suspect very few people would watch the programme and end up with a Standard Life Stakeholder; more likely they will Google "open simple pension plan" and end up with the likes of Moneyfarm or Pensionbee, if the algorithms are doing their job. And the non-driving-instructors will most likely look at their existing workplace pension.

I actually think some of the "minor" errors from the second list are worse than the first list - but still unlikely to lead anyone into a majorly bad decision. (The AE one is probably the worst, but if it leads to someone thinking they need to increase their pension contributions as 8% isn't anywhere near the "take half your age" rule, job done. If they complacently leave it, AE is still likely to achieve its aim of keeping them off means-tested benefits. The aim of AE is to ensure a minimum acceptable standard that keeps people off means-tested benefits, not to keep everyone in the lifestyle to which they are accustomed.)

(I haven't watched it and am going by the OP's summary.)

jem16

I watched his programme last night even though I never watch it at all. Of course all the Waspi/BT60 mob have been harassing Martin all week even though it was never likely to be about the state pension. That argument is currently raging on his FB page after someone dared to criticise Martin. What I find more interesting there is the amount of people not backing them and calling out their myths.

As to the show itself, not a lot you could put into 22 minutes and some of it was questionable as already mentioned. For some it was too little and for some it was way over their head apparently. However it does seem to have got people thinking as apparently the Pension helpline was deluged with people calling. So that's good.

Telling people to come here would have been helpful too and they probably would get a lot more help from here.