Advice Furor

I am (obviously) a great advocate of people seeking advice when it comes to all matters relating to pensions in the UK. We have one of the most complicated pension systems in the world due to decades of rule meddling and the intertwining of a complicated tax system.

 

One of the up shots of the Budget announcements on pensions was the proposed increase in the options available for those retiring and also amendments to the pre-existing options. All in all, it made the subject of pensions more complicated than ever before.

 

It is now almost impossible to make an informed decision on pensions without seeking advice and for many this is outside of their financial reach.

 

Or is it?

 

The Chancellor announced in the budget that everybody should have the right to access free advice at retirement and launched the 'Advice For All' Scheme, setting aside £20 million to fund the initiative for the next 2 years.

 

Great news, right?

 

Oh come on.....you know the rules by now with this lot......always check the small print!

 

According to the 2011 census, 1.2 million people will retire over the next 2 years......which leaves the new 'Advice For All' Scheme providing £16.67 per person.

 

In a word......pathetic.

 

We all deserve better than this.

 

Election Budget

Today I’m angry……really angry.

 

The Budget didn’t see a caring, compassionate and visionary Government do what was right for the long term good of our great land. Instead it parked the election campaign bus outside of Parliament and flirted to the point of indecency with those they are really bothered about……the voters.

 

I’m angry……really angry.

 

The nature of my job sees me exposed to the frustrated public that are sick of the claustrophobic limitations of pensions at retirement, angered by the confusing and restrictive nature of ISA’s and angered by the banks refusing to give credible interest rates to elderly savers.

 

Yet, in one 60 minute speech where “support for savers is at the centre of this budget” he attacked this by:

 

1.     Removing the need for annuities at retirement and permitted full access to a pension by way of a full lump sum.

 

2.     Simplifying ISA’s and raising their limits.

 

3.     Setting aside £10bn of new fixed rate bonds at higher interest rates for those over 65.

 

So this is all good then right? Well……the ‘fixes’ to these problems were due years ago and this has to be good news with those with money in savings / pensions.

 

But we’re missing a point if we do not revisit the quote above……

 

“Support for savers is at the centre of this budget”.

 

But there was no support for savers……just more options for those that have already saved. ‘Support for savers’ is offering tax breaks to encourage those with little or no savings to save for their long term future.

 

Now I don’t want to say I told you so but I posted ‘Know Your Voters’ in January:

 

http://stevesmithlive.blogspot.co.uk/2014/01/know-your-voters.html

 

Now consider that 75% of the population over the age of 55 will be active voters next year. And remind me which group of people this is……it’s those with Pensions, ISA’s and poor interest rate bank accounts. Isn’t that a coincidence!

 

The quote should have been “support for those that already have savings that are really frustrated by their current position”.

 

So in one 60 minute speech, George Osborne effectively made an election give away in return for votes to those that are most likely to vote. And if that wasn’t enough……the introduction of these new rules will be delayed until as close to the General Election as possible so that it is fresh in voter minds!

 

In addition, there were no incentives to encourage people to save as (pure and simply) this demographic has a low probability of voting!

 

This was the most blatant attempt at vote winning I have ever seen at a Budget. All I want from any Government / Budget is to represent us well, do what is right and do what is needed for our long term prosperity instead of it being an Election Campaign Broadcast.

 

Is this really too much to ask?

 

I’m angry……really angry.

 

Political Aphrodisiac

As a proud Englishman, I have watched from distance Scotland’s quest for independence with intrigue. Whilst I am remaining open-minded on the subject, I keep coming back to the same subject……oil.

 

As the last few decades have shown, oil is a pretty big deal for world governments. It’s like an aphrodisiac for politicians. Billions have been spent on wars that didn’t need fighting leading to thousands of lives that didn’t need to be lost……all because of oil.

 

Here are the hard facts……there are up to 24 billion recoverable barrels of oil remaining in the North Sea with a wholesale value of over £1.5 trillion. Those figures meant nothing to me until I understood that this is more oil tax revenue still to come out of the North Sea than has already been generated. That’s a big deal……a colossal amount.

 

As we edge closer to the referendum date of 18 September 2014, always keep those 3 little letters in mind……as it will dominate many angles and agendas.  Don’t expect anything other than O I L to be at the forefront of aroused politician minds.

 

 

Lowballing Low Point

I discussed the issue of ‘lowballing’ a year ago (see link below) and things have a taken a further twist.

 

http://stevesmithlive.blogspot.co.uk/2013/03/lowballing.html

 

Lowballing was essentially a further banking scandal involving banks fraudulently (shock!) manipulating the interbank Libor lending rate for their own financial gain. This wasn’t policed properly by the regulator, an opportunity was found by the banks to make money illegally and (quelle surprise) money was made.

 

But here’s the twist……a year on and the Bank of England has now launched an internal investigation as it appears that staff “knew of or condoned” the fraudulent activity.

 

The Bank of England are the guardian of the UK’s currency and, as the main bank regulator, are responsible for ensuring the safety and soundness of UK banks. However, London can’t promote itself as a major financial hub (it is the largest foreign exchange trading platform in the world) yet be riddled with corruption that would make a third world country wince.

 

I can (to a point) accept incompetence from the bank regulator but I cannot accept knowingly being dishonest.

 

As we have seen over the past 5 years (and beyond), if you give the banking sector enough rope, it will ultimately hang itself.

 

Is it too much to ask for the regulator to avoid similar behaviour?