Pace of Pensions

Another week, another pensions reform announcement……the pace of change feels relentless currently. One thing is for sure……pensions really are looking sexy at the moment. To be fair, they always did but too many judged their beauty by how they looked rather than getting to know their personality. Beauty is more than skin deep.

 

For once, the detail of the recent announcements wasn’t important (even to pension geeks like me). Instead, what was significant was the packaging of the announcement and the reactions it provoked. Putting the subject of saving for retirement on the front page of newspapers and at the front of TV news stories can only do good.

 

This really isn’t about whether pensions are a good thing or not……it is about encouraging people to save for retirement. We have more than one generation that simply isn’t saving for their retirement and it is a slow burning time bomb unless it is addressed.

 

Positive news about the freedom and flexibility of pensions will help to change attitudes. But this is not a ‘one and done’ exercise, there must be a concentrated effort from W1 to change the culture of the non-saving under 40s.

 

Let’s hope this continues to be at the forefront of General Election campaigns to defuse the ticking time bomb.

 

It’s a start.

Co-Op Tatt

It’s been a strange old year for Co-Op Bank.

 

Firstly, there was a £1.5bn black hole discovered in its finances……then there was the drugs scandal involving former chairman Paul Flowers……all resulting in the ‘ethical’ bank ending up in the control of a hedge fund as a consequence.

 

All of which undermined the core of Co-Op Bank’s identity…..it stated its USP was the ‘ethical alternative’. When you are owned by a hedge fund which has a primary aim of making as much money as possible, ‘ethical’ and ‘co-operative’ seem a distant memory.

 

Now that the dust has settled (kind of), Co-Op Bank is hoping that a TV ad will start the process of restoring its tarnished reputation.

 

How is it doing this I hear you ask. By showing a man getting a tattoo on his back with the words ‘values’ and ‘ethics’. What followed was a public outcry that it was promoting tattoos. Fear not said Co-Op Bank……it was a fake tattoo.

 

So what is the message? Fake values? Fake ethics?

 

Perhaps whoever was responsible for the millions that have been spent on the rebranding and public messages might have wanted to check the definition of the words ‘ethics’ and ‘values’ before sending mixed messages.

 

Just a thought

Every Fiddle Helps

The Tesco accounts scandal continues to roll on……the snowball grows……the plot thickens. Given the lies and deceit, you would be forgiven for thinking that this was the banking sector we were talking about not groceries. Bugger……forgot Tesco is also a bank. Oh well.

 

The story basically goes that Britain’s biggest retailer has a £250 million shortfall in its profits. The black hole was found in its commercial income……from income being booked from deals with suppliers very early (too early) and at the same time delaying the cost of the deals (too late). And that ladies and gentlemen is how you create a £250 million hole.

 

Tesco’s reduced profits will impact on its share price and the level of dividend to be distributed to investors……this effects the value of ISA’s, Pensions,……and so on. In effect, Tesco’s share price has been a lie.

 

To be fair to Tesco, they have brought in an external accountant to verify the accounts and sacked 8 company executives. Swift and merciless. But as we have seen with the banking sector, if employee pay is linked to profit……risks will be taken and lies will result.

 

All very sad. All very avoidable.

No Longer Wronger Wonga

The word detest is a mightily powerful word……to dislike intensely. But that is the only word I can think of towards any company that constructs its business model around praying on the vulnerable.

 

With this in mind, it’s very fair for me to state that I dislike the payday lender Wonga and all that it stands for. Oh sod it, let’s go for it……I despise them.

 

I wrote about this back in April http://stevesmithlive.blogspot.co.uk/2014/04/wronga.html but that was before the announcement last week that it is writing off £220 million of debts for 330,000 customers after putting in place new affordability checks.

 

Let’s put that another way……it is writing off £220 million of debts for those people that should never have had the loan in the first place as there wasn’t sufficient financial resources to repay it (which is the perfect scenario for Wonga).

 

Let’s be crystal clear here……Wonga didn’t reset it’s moral compass and find a conscience in the Autumn air……the regulator did what it was meant to do and shamed Wonga into the action.

 

Hats off to the Financial Conduct Authority for doing its job.

 

Let’s hope similar companies find some worthy principles sharply.

Political Flirting

It is fair to say that the vote winning flirting and pouting is well underway in preparation for the General Election next year.

 

Whilst I am always incredibly sceptical at the standard of smooching on offer from upper class middle aged former public school boys, there really has been some good to come from the vote winning antics recently.

 

Firstly, Scotland. Whilst independence has been an important issue, let’s cut to the chase on the key matter……just under 10% of the votes and Parliamentary seats will come from Scotland. Scotland could end up being the difference between an outright majority and another coalition Government. Scotland is a big deal.

 

That’s why each of the parties will work with Scotland to ensure that it gets what it wants (broadly) from the recent yes / no vote……i.e. more independence but not total independence. That can’t be a bad thing.

 

Secondly, Pension Reform. The last 6 months has seen the most radical reform of pensions in their history. The previous rigidness of pensions caused frustration and dis-heartedness for millions……yet they have been changed forever for the greater good. Why now? 75% of the over 55’s will vote next year!

 

Just remember……not all the strutting, seduction and point scoring for our votes is a bad thing.