People aren't saving enough for retirement: whose fault is it?

I wonder: what has happened to the pay of top union leaders over the same period of the TUC report and what sort of pension deals the top union leaders themselves have got?

As is clearly shown above many people cannot afford to save for anything, including a pension. The minimum wage amount shown is overstated as most of the people on this subsistence level get paid £10,792 for a 35 hour week.

Many of my staff have opted out of the pension scheme and no amount of cajoling will get them to join. They seem to believe that the state will look after them and somehow I can't see that happening. The fewer people buying in will lead to poorer returns for pension schemes in the future. I do wonder what happens to pension pots of people who die early and have no dependents, is it pooled or just swallowed up by the firms.

I have put over 12% of my salary along with my employers 7% and all I see is a lousy investment performance from allegedly one of the best firms. Add to that the awful annuity rates and it is understandable that the whole industry is mistrusted.

I don't have any solution and I think it is a ticking time bomb.

Unions do an OK job at workplace representation over discipline and sackings. They cannot win in a situation where there is a large excess of supply over demand - as there is for unskilled and semi-skilled labour.

We also have a regressive tax system in which the poor bear an unfair share of the burden.

We need a decent education system and a more redistributive tax system. Perhaps we should outsource our government to one of the Scandinavian countries?

"I do wonder what happens to pension pots of people who die early and have no dependents, is it pooled or just swallowed up by the firms. "

It depends - if its in an annuity with no guarantee it would probably get "swallowed up".

If its unvested the trustees of the scheme would probably make a payment to the deceased's estate (unless the member nominated a beneficiary to receive lump sum).

I think the government must own the problem, people should be given incentives to save for a pension it will save the country money in the long term. Perhaps better tax breaks or something similar

It must be very difficult for someone to tell their family that they can't have a holiday this summer because they are putting £2000 into their pension fund.

If people retire and have very little pension, they will qualify for various extra state benefits. I don't know the exact figures but you probably need a pension fund over £100,000 for the pension to exceed the value of all the extra state benefits. And it is very difficult for a lower paid person to accumulate this sort of pension pot.

A few words that might shed some light - incentive, Ipad, now, fees hungry low performance pension industry...

Scottish Widows hasn't a clue whether people are, or are not, saving enough for retirement. Does it know how many caches of sovereigns and krugerands are stashed away around the country? Does it know how many more people are trusting their own instincts rather than pension fund managers and building up their own personal share portfolios? (I shouldn't be knocking them like this, I've a pretty hefty stake in LBG directly as well as being a taxpayer). Does it know how many are sitting on property profits from their homes or investment property eventually to downsize to fund their own retirements in their own way? No, of course it doesn't. They are just whinging, like Citigroup did in today's Telegraph, outrageously attacking NS&I's index linked certs. (At least the Telegraph's readers have the measure of Citigroup - comments are well worth a read.)

Those who are coming up to retirement who have saved for the last decade with SW and now look to collect a derisory annuity in rapidly depreciating currency will be wishing they had done it themselves instead of trusting our pension fund industry, or successive governments, or the Bank of England.

I think the government must own the problem, perhaps give incentives for people to save for their pension. Tax breaks might help but if the underlying investment which supports the pension is poor then people will rapidly lose confidence and won't bother to save. Annuity rates don't help either. The comments earlier about low income families is very relevant, people on low wages less than £20k per year will find it very difficult to get a pension pot which pays them a reasonable income. Only the government can solve this problem through tax incentives, legislation of some kind and incentives to companies. A difficult issue.

I think that some people on lower incomes see very little benifit in investing in a small pension.This is influenced by the fact that the government tops up pensions for the needy any way.

I prefer to save as much as I can because one day a future goverment may change it's mind.The growth of pension pots has not been that good over recent years and dear Gordon Brown did not help when he chaged the tax rules.Still I expect that Gordon is financially ok.

I will reach retirement age in a year`s time, and currently have 3 occupational schemes which I paid into for approximately 15 years, 5 years and 5 years respectively, the last of which is predicted to be worth £600oa. In addition, I have 2 private pension plans with different insurance companies, and the projected income will be truly pitiful. One, which predicted 30 years ago, a lump sum to be invested of between £30k and £50k, will provide me with an income of roughly £450 pa. I, like so many of we ordinary workers, have been royally stitched-up by the stock market.

Where is the incentive!? I did not have a mortgage, I had investments, pensions (one taken two not) and savings in cash. Now where are, no economic growth, zero returns in fact -6% inflation adjusted, and an investment market that is a minefield? How can they consider 'Global Gordon' for head of the IMF, at least DSK's (alledged) travesties were more colourful but similalrly denied!!?? Those that were/are deep in debt are laughing at our prudence as they get bailed out by low interest rates. No the government burdens the young with student loans, the public deficit only grows and the young live for today with an economic uncertainty that the post war generation faced with atomic mutually assured destruction! I am increasingly getting to the 'take your assets divide them by your life expectancy and spend it! The state the NHS, social services and Government finances are in we won't be able to fund our old age anyway, just take the pill when the money runs out!

I look forward to the pension providers doing their bit to help and therefore will all be reducing their 1.5%+ charges for managing the funds to the bare minimum.

Or is this just a case of them trying to drum up more business given their real incentive is just about increasing money under management and not to increase the wealth of their investors.

Unless you are in a fortunate position to be able to take a gamble, then the ever changing pension/tax regime doesn't provide any rationale person with a good argument to lock their money away for 30 years+.

Means tested benefits destroy everyone's savings. If you are made redundant and have savings of more than £16,000, you can whistle for state benefits. Most of the low paid are in and out of work all the time in an unstable economy. They never build up enough credit for earnings related unemployment benefit.

l dont think there's any point in a average earner saving for retirement, if you do the goverment will find a way of diluting it as gordon brown did with his pension fund tax in the nintys, l have two pensions taken out in the early eightys, l was reasured that when thay matured thay would be ok, l totally agree with michael brooks as well ,when the stoke market crashed we where told no profits, but when thing where booming you guess what no or low profits,as far as insurance firms are concerned l thing there should be an inquiry into miss selling ,l think there worse than the banks.

Michael Brooks, have I read the last part of your post right?

How much did you invest in that pension plan over the 30 years in total and only now expect to see £450 per annum.

If £450 per annum is right that is truly shocking, that is what you would expect from maybe a £9k pension pot, so about 67% to 80 odd% out in their predictions.

I think really that a lot of the blame really lies at the feet of the pension provider with their ridiculous charges and fees. Sorry to hear what a bad deal you had from these ogres. It is a shame that ISA's and PEP's weren't around 30 years ago.

When I first started planning and saving in my personal pension ( 1985 ish ). annuity rates were 15%

Now they are only 5%, so 3 times as much capital is needed. Thats why I stopped contributing 10 years ago.

The problem with pensions is that you can't get the money out. Best to save in ISAs and then buy high yielding property - 8% net is quite achievable, eg students. OK, the property capital values may fluctuate - but a pension annuity is a guaranteed 100% loss.

Dave Duffy

I see that the enormity of the situation is dawning on you. It's not ISA and PEP availability that matter (they too require FSI providers). My experience is that Doing It Yourself (by any of a variety of ways) is around ten times more efficient at delivering security in old age than trusting any in the financial services "industry" to deliver it for you.

I don't think it's likely that the government will own the proble. It was Gordon Brown who has created the mess by stealing the dividend tax relief out of pension savings. Is the current or any future government going to give them back?

Also, how many pensions companies work in second rate offices in secandary locations?

Now, most of the big pensions companies are public companies with investors to satisfy by way of divdends.

It's hardly surpising that the pensions savings industry is a mess.

Perhaps its time for a change of thinking at all levels to recognise that people are healthier for longer and even when not so fit will get care and the medicines needed to survive for longer at greater cost.

The government created a big part of the problem, the finance industry is being what it is best, voratious and greedy. People, the public, are living for today.

It, pensions, should be raised to the top of the priority list, not salt reduction, not obesity, not defecit reduction. All of these will be dwarfed by the lack of pension provision if the issue is not addressed now, today, before 14.20.

Thnk about it and those with the means, get the issue raised!!

Never happier than when you're union bashing, are you? Successive governments have successfully emasculated the unions and then completed the job by allowing unlimited immigration from mainland Europe in order to force wages down - there's the reason, nothing to do with "integration" or "melting pot".

It is a frigging nightmare saving for a pension.....just look how the stockmarket has performed and continues to perform since the dot com shambles at the beginning of 2001.

The FTSE is still more than 1000 points lower than at the end of 2000.Yes there have been ups and downs,but it is a minefield even if you think you know what you are doing.

As Graham said....best take the pill when the money runs out!

I'm staggered that Codger thinks that a family holiday is more important than saving up for your old age!

People have got complacent believing that the state will put everything right and they need take no responsibility for their own welfare.

The writing is on the wall that the country can no longer afford to subsidise the old age of those who cannot/will not save for their own future, so it's time that we all get a grip and manage our resources more rigourously. Taking a £2000 holiday when you have no savings is bordering on the criminally stupid in my opinion.

It is the fault of those who don't save.

They have an attitude of 'live now , pay later'.

Even better if someone else pays later.

Certainly people's expectations are much higher than they were in previous generations. Poorer people need to get used to spending on food and shelter, saving for food and shelter in their retirement, and not spend on cigarettes, alchohol, TV and entertainment. Welcome to the third world.

I should have added that private pensions are one of the biggest rip-offs going. If you want to save, go for the slightly smaller rip-off of an ISA

Fault is down to G Brown esq and the raid on pensions and removal of the tax relief. I had a pension but Company went bust due to Pension Hole ( which would not have been there had he not changed the rules)

The Government of Gordon Brown took £5bln / year in a new Tax, on Pension Funds starting in 1997; which has left distrust in it's wake! People know that it can happen again! When challenged on this Brown said " thats ok, they can save more"!

The Pension Providers themselves take too big a bite of the Funds, and people no longer trust them.

The Unions are two faced as usual, and pay ' lipservice' to the whole problem; and show themselves to be self-serving.

When all the factors are taken together, the people/sheep dont't have much wool left for themselves!

Why are Governments surprised; after all people can think!!!

As an Equitable life loser I can tell you why people are not putting money in pensions.Also they know the Lying Bastard Politicians and Pension Companies will find a way of Taxing it or depriving them of their full entitlement.

The poor are not over taxed in the U K,the rich are,it kills the incentive to work harder and better yourself.

Codger wrote that it must be very difficult for someone to tell their family they can't have a holiday this summer because they are putting £2000 into their pension fund.

Well that's effectively what I had to do throughout the 70's and 80's and now all I hear is that baby boomers like me are benefitting at the expense of the younger generation

@ Tony Peterson,

I only mentioned the tax-free wrappers for the tax savings on doing own investments. I would say over 30 years that Michael Brooks would have to been extremely unlucky not to have grown a much larger pension pot then the pension providers have turned up with.

I was working with London Transport and then London Underground in the early 90's. They had a final salary scheme and we had the option to make AVC's with.... Equitable Life. I was not too financially aware then but could see the charges well hidden in the small print at rear of AVC booklet. 6% Unit spread, monthly service fees, policy fees, Annual Management Charges and anything else they could come up with. I recall it was around 10% maybe 11% in total so no way did I sign up but instead started an Investment Trust PEP. I continued with the PEP's even using them for a mortgage repayment vehicle.

I was just surprised that Michael Brooks ended up with such a low sum, but 30 years worth of Annual charges plus the selling agent's commission must be to blame for the bulk of the problem.

A stupid comment in the article about why the union leaders haven't done more. I agree they could have been more militant, but when they object to policies the right wing press, the CBI and the financial establishment generally is down on them like a ton of bricks. But more important is the the policy of successive govts., particularly Thatcher's, but all her successors, to keep the Unions weak.

We do have a minimum wAGE, BUT THE ARTICLE POINTS OUT THAT IT'S ONLY 80% OF WHAT PEOPLE NEED TO LIVE ON. There can be no thought of pensions when you're in those circumstances. Most of those people are un-unionised anyway for a range of reasons, Governments are to blame for poverty because of their taxation/redistribution policies. I suggest the writer of this article stcks to what he knows - the machinations of City fatcats.

On the one hand we have the British government which funds our retirement out of cash flow. On the other hand we have Norway which has built up a sovereign wealth fund that currently has approximately ₤70k per inhabitant. This is available for viewing at: http://oljefondet.no, and is truly a wonderful sight. Or it would be, if I was Norwegian.

Gordon Brown went on for years saying he was being "prudent" when we were theoretically rolling in the stuff. So far, no sign of the present incompetents (sorry, "incumbents") being any better. All signs are that Georgie Peorgie is going to leave us all crying.

Agree with Anon 2 (at 14.14.)

I had the same and Equitable Life, too!

Have also seen in great detail, through study, the tinkering with the laws relating to private pensions, which took place during the years since 1997. Were corresponding adjustments (negative) made to the public sector pensions at the same time (those which are unfunded, I know there are different types)? Mr Brown has crippled the private pensions industry, as well as exacerbating divisions in society. I do not intend to argue with my "neighbour" who has a better deal but the differences have widened due to his actions (and his increase in the number of civil servants ... which in itself causes a problem).

David 111 - I heard on the radio yesterday that some twenty somethings thought that their bosses were asking them to work too hard, using the current austerity as an excuse. It makes me wonder if their dissatisfaction is more to do with all those stars given with the A grades and the unrealistic expectations of newcomers to the world of work.

The economy is all out of kilter - if it ever was not - too many peope living beyond their means, too many people expecting something for nothing, too many people taking more than their fair share of the spoils, government and public domain with vested interest taking too much in taxes and subscriptions to service profitless purposes. All wants to be satisfied now with little regard for the future. We are all to blame to some degree, it's part of the human spirit, though some have the wit to see - better education might help others - but are frustrated by the greed and disregard of others.

I have saved for a pension and a combination of Gordon's raid on pensions and incompetent fund management saw its value fall by 30% before the crash. Coupled with the last governements policy of means tested funding means that if you havent saved you get paid, if you have saved it gets confiscated. So seeing that what do you do? Coupled with miserly rates for savers and inflation effectivly reducing debts what is the point of saving? As i have said before I am a fool, I should have gone on lots of holidays and squandered everything I earned. I would now be on state benefits instead of setting up a new busines in my 60's to try and produce an income. If I or my wife need to go into a care home our house will be sold by the Local Authority to pay the bills which as we are paying them are higher than fees they charge the LAs in order to subsidise the LA paid residents, is this fair? So I would ask why bother saving? The previous government has made it unatractive and the present government are not doing any thing to improve the situation. Final rant: It is Gordon's fault with the help of his trustry sidekick Ed Balls that most final salary pension schemes are in large deficit, thus making good British companies targets for foreign takeover and forcing them to stop final salary schemes. All while expanding the sate sector with its unfunded pension liabilities. Rant over for now anyway.

@Smithy - and yet Norway doesn't have the desire to be the police of the world or invading other countries..

lots of posts on here which is unsurprising really, it's still a hot topic this one.

Fact is, no one is going to look after you in your retirement other than yourself. So if you think pensions are a waste of money and time even with your tax relief up front at your highest rate 20% or 40% that is nice mind, you still have to save somewhere! Property, maybe, but you have to release the money in the property and what happens if you retire when your in a property gloom like now? Maybe you'll have enough properties to survice off the income, of course if there's no debt on them that bings another lovely subject like inheritance tax into the equation. ISA's, agree, these are fine, but a max of £10k ish PA and you have to be disciplined not to withdraw the cash and spend it on that convertible or jimmy choo's

I'm still a great believer in Pensions, I think they offer a great solution to fund your retirement and invested correctly with at least annual reviews you should do just fine.

Thanks, Ms Bourke. Enlightening!

My wife and I saved all our lives for a pension. We managed to pay school fees for our children. And make no mistake, I was a very average joe. No big deal salaries.

Anyway...our next door neighbour spent the lot on holidays, trips to Disneyland, you name it. He retired with zilch and gets all the allowances.

Us...our pension makes less than he gets now...and we get no hand-outs.

I'm not jealous. I think he was very switched on spending the lot. He played it that way deliberately. He knew there was no point in saving because he'd get a good hand out when he finally retired. We have a beer and talk about it all from time to time. Next time round, if there is a next time round, I hope I'll know what to do.

Providence doesn't pay

Aren't we all to blame?

I do hope lots of other people will save; this provides the funding for my own strategy which will profit from other people's folly in believing that their savings will be worth something in the future! Yes, I am being selfish. That is because I wish to be able to continue eating right up to my dying day. Savers, I love you! Please keep saving. More and more savings are needed. Thank you savers, thank you very much.

PS: It would be interesting to know how much Mervyn King and Charlie Bean are saving

I agree with earlier writer about the whingeing pension fund managers. So why would you give good money to them? They spend it on high salaries, fancy offices, company cars and fantastic expenses all to be paid for from investment returns, BEFORE any return to the pension saver. If people can save independently and go the DIY route to savings and investments they probably would do as well as any highly paid Financial Adviser unless the adviser has a real crystal ball. Essentially, pensions savings controlled by law is another form of legalised taxation which only benefits those in the City and all that income is the life blood of the stock markets. Pensioners loose if the markets and funds fall. Fund managers still take their salaries home. No wonder they are whingeing if the money isn't flow3ing in!

Ben Hall - I don't understand how your neighbour is so well off if he retired with zilch. The state pension isn't that fantastic.

I saved 15% of my salary with a pension fund all my working life. It did not give the 2/3rd of final salary promised, so much went into admin. at the pension company and I ended up with 18%. I am lucky because I made several capital gains and had a company which was wound up with a large amount of cash.

The cash I managed myself outperformed the pension by a factor of 3.

I recommend any young person to save for their old age, but do not do it with a pension company.

Like others, I fell foul of the the debacle with Equitable Life and also purchased a significant holding of Lloyds shares before their value collapsed. LLoyds bank, a stock for "Orphans and Widows" and not involved in sub prime lending,was encouraged by the goverment into buying HBOS and all without any consultation and approval from the shareholders. I retain just 20% of the capital invested in my pension over 35 years. It would have been far better to buy fine wines as an investment, all CGT free and a top liquid asset !

Well I became self employed when I was fourty, with the intention of retiring at sixty. With this in mind I realised that to achieve this I would have to max out my permissible contributions - which I did. At the time of starting this plan with Equitable Life I was given a pension forecast by them which was to the order of £17k per annum - very nice! In the event, after they'd done their top skimming

of my fund I took out an annuity with another company which gives me £5700 per annum fixed at this level for life. Knowing that inflation would make this virtually worthless within a few years, I invested my 25% tax free lump sum from the pension along with some other savings that I had and opened an online share dealing account.

Someone said earlier that the stock market has done nothing since the dot com bust, this is absolute nonsense. I was probably lucky that I went into the market at the the back end of 2002, the footsie was on its arse the war clouds were gathering in Iraq and the city boys were getting out of the market pronto. In the following six years from then I had stellar returns in the market with a big short term blip in the October 2008 crash.

We all must be responsible for our retirement funds, but with the benefit of hindsight I would never again put money into either a pension fund or a managed fund of any sort whatsoever. The only way for anyone pension planning, in my opinion, is to go down the self select ISA route. You are at least in control of your own money.

The losers are of course the poorly paid workers who have not got a cat in hells chance of making any provision for their futures.

Of course David Cameron could correct this issue if he cut back on the aid handouts to other countries and stopped fighting expensive wars, that he's going to lose. The proceeds from these exploits could then fund our own deprived.

Don't hold your breath - it won't happen.

What is quite obvious is that people have become victims of the stock market, products and charges. BUT there is a way around all of this mess.

You see, where ever you invest, if you follow a scientifically proven model, you can make money over the long term. It says that you are entitled a return for the risk you take. So the more risk you take, the more you should get back. However, simply "buying a fund" and leaving it there won't get you much. Likewise, trying to time the market, buying and selling won't get you much either.

The way around it is by working out the target growth rate required, after all charges, which will give you the end result you seek. A portfolio can then be constructed to achieve this. An Chartered or Certified adviser can work this out, BUT you've got to make sure this is monitored (by him) on an annual basis.

Now people don't like to deal with advisers because they either mistrust them or think they can DIY better. In the case of the former, you can't be blamed as commission drove product sales - not advice. In the case of the latter, there is little chance of busy people being able to out perform the stock markets when most fund managers struggle!

The future will be all about you.

Only you will be able to decide whether you want to get proper advice and pay for a lasting service. Advisers will change (when commission is banned) as they will have to prove their worth (not by beating the market) but by maintaining that strategy to achieve the target growth rate.

I'm afraid that people will have to pay experts to solve their problems in the future. Rest assured, the experts will be just that as the banning of commission will eject many of the shabby salesmen out there. If you don't seek expert help, you will simply have no one else to blame. Fund managers and providers are beginning to realise this and are quaking. About time!!

@TA - just a question for your suggestion - why would the 'expert' bother about managing/advice you how to manage your money if they are so damn sure about the path of the future?

The fact is that they don't - and most expert will do no matter than a tracker...

I'm with PL on this.

Of course Scottish Widows will try to scare people into thinking that they are not saving sufficiently for retirement - they would, wouldn't they- it's in their interests!! And I bet that their pension offers are not the best available either. It's all about drumming up business and ripping people off.

And if they did reduce their charges then people might just get a slightly better return on their investment. But I wouldn't hold my breath. They are just trying to con you like everybody else is in the Financial Services Industry does!! They are all rogues and thieves!!

Meanwhile the Financial Services Industry carries on awarding themselves vast unwarranted salary increases and bonuses, whilst shafting everybody else with crap products and get out clauses so that they never actually have to pay anything but the bare mimimum.

Tax them to death and make them move away and let's get back to making tangible things again that will earn the country real money, and not drive up the prices of food, oil and commodities which are the life blood of everyday living.

TA

You wouldn't be an adviser yourself would you? By any chance?

I think most posters have developed enough Cartesian scepticism to detect scam advertising for a discredited "profession".

G Brown and that thing that goes with Balls not only ruined the economy but 90% of pensions and yet the thing still spouts as if he knows better than the IMF and wouldn't be able to run a whelk stall. Good at creaming the expenses.

Thanks to the aforementioned my SIPP is paying half of what it should be, but my private portfolio has well and truly outperformed by several times my SIPP..

All their theories on economy have been shown to be false, and failed just as the communist economies failed, except for them at the top, the politicians (and seat polishers serving them) who have been raking it in for a g** awful job that would have have them sacked outside politics, if not in jail for fraud/theft.

Benefits need to be savaged to make working attractive, even for a pittance, and no additional sums for baby farming or them that arrive expecting support for having done nothing for the economy prior to their arrival.

Back to basics, no work, no eat, except for the genuinely disabled/ill needy. Everyone needs to provide for their twilight years, be it ever so small, not for those that led the life of Reilly with no thought for later years.

There's a lot of comments here, all saying more-or-less the same thing. How could we get the mainstream media to pick up on the widespread hatred of the pensions and savings "industry" and counter the propaganda put out by Scottish Widows? At the moment the institutions like Scottish Widows get all the publicity. Who is going to speak up for the ordinary folk who have suffered from the theft of our savings over the years?

My reading of TA's post is that he is a scamster, and I will continue to read it that way unless he should have the courage to identify himself and tell us how he tries to earn a living..

Razzgox

"let's get back to making tangible things again that will earn the country real money, and not drive up the prices of food, oil and commodities which are the life blood of everyday living"

But making things increases the demand for, and therefore the price of, oil and commodities! Shuffling money around electronically (aka financial services) only burns a small amount of electricity.

Going Loco, I don't know the answer to your question but the comments of people like Ros Altmann do get reported in the media and she is accessible through her website.

Equitable Lifers can join EMAG, if they haven't already.

I think that one of the reasons that ordinary folk don't get heard is that much of the damage has not yet been seen and is therefore not believed.

Many, many people in retirement from the private sector are on final salary schemes and the number on dc pensions (like you maybe?) is not big enough to be heard. Those of us who will depend upon our defined contribution pensions which will pay four figure pensions "if you're lucky" will increase in number rapidly, over the next few years. Then the situation will become much clearer and the government of the day will be blamed. GB has created a divide between the haves and the have nots (of a final salary scheme) and the consequences of his actions will only become visible in years to come (our retirement). Isn't that why it was called a stealth tax?

It is the system which is wrong.

BTW, IFAs are not all bad. They are as frustrated as the clients are about the crippling new rules which help neither the client nor the IFA firm. IFAs have commented on the extent of the rules relating to the NEST proposals (dreamed up by Labour but continued by the coalition). It seems that small businesses will have to hire an HR team to ensure compliance! The "simplification" of the pension system by the last government has resulted in a rule book which is bigger than ever.

I rip off Brittain, UT, OEICS and pension funds like Scottish Widows, take about 50% of the investor's pot in charges (after 40 years) but through a conpiracy of silence no financial columnist like your good self, ever mentions it..

The wonder is not that people invest so little for their penson, but that they invest so much.

Simply abolish all DDB pension schemes and this will reduce our deficit, reduce tax, council tax and so on. People can then invest the savings.

Quite simply we have a divided society when it comes to pensions. Remember that it costs over £30k to buy £1k of index linked pension at 60, so an average teacher on £35k who will get £17.5k pension has a pot worth £525,000. Those on DC schemes would have a hard job building up such a pension pot. The unions have been very effective at keeping these unaffordable schemes and have negotiated some good public pay rises in the past despite the fact that with longer lifespan the same employees have been effectively getting a hefty hidden pay rise in the greater cost of their pension schemes - all to be paid by our children.

It seems to me that your suggestion (first para) is the only way to create equality of opportunity, at the same time as eliminating the need for cuts such as library closures, lolly pop ladies etc. I can't see it happening in the short term though because people want to preserve their retirement Benefits...

ps: I hope that at the next election, voters will remember who did the damage by stealth to private sector pensions.

This string fills me with as much sadness as trepidation. So much cynicism and, in my opinion, none of it mis-placed. There is a commonality of opinion here that is ignored by the establishment. My personal experience is no different. I was a senior trader in the City for a long time, I by and large opted out of company schemes and did AVC's. However, even those bank schemes I am in are showing massive deficits, why is it when the banks and brokers can make billions out of the capital markets that their largest external client group, the pension funds and insurance industry can't match it! There was a phrase 'Never mistake a bull market for brilliance' while the stock markets where steadily increasing pension funds and endowments by and large performed quite well, add the tax relief, especially as a high rate payer and it was worthwhile. However as the range of financial instruments became wider, i.e derivatives and these became accessable to a wider audience and the philosophy of current price reflecting (potential) future value and not based on a good earnings flow in a well run company that it all went t*ts up! Now you can see why I left the City...not a popular philosophy. However, if I had to pont to one person mostly to blame for this without a shadow of a doubt it would be Gordon Brown. He presided over and set a precedent for an environment for the City and capital markets to run amok, with 'light touch regulation and the sidelining of the BofE after throwing them the bone of control of monetary policy, couple this with the tax raids on pension dividends (which did make it easier for the idiots to perform) and the squandering of public assets including our gold reserves which basically gave the wider signal that when you can borrow what you like with no assets, the ultimate in leverage, that the banks could start leveraging and 'off balance sheet' placing of their business that there was and will be no turning back. We need an economic and social revolution in this (and other countries) otherwise we are on a path to mutually assured financial destruction. The thing is, if we are all so excercised by this, why aren't we on the streets like they are in Egypt, Syria etc. despite the tut tutting that goes on by Hague et all we are suffering a similar level of tyranny orchestrated by succesive Governments and in collusion with the establishment and the City presided over by Sir double barrel-double barrel to get the right and not to radical changes. And finally yes, even Thatcher baulked at the Civil service and public sectors, if you are serious about reform David...get stuck into those public sector pensions now.....WE CAN'T AFFORD THEM!

Graham,you are undoubtedly correct,can we not use Citywire as a basis for communication to start the Middle Class revolution(and hanging of the last Labour government)that the country needs and deserves

Graham, I recognise all of it. I was there, too, in my humble role. What worries me is the number of people who don't know about the history you have described.

It needs to be shouted out loud in a responsible way, though I don't know quite how. If the lessons are not learned and dealt with, there may well be civil unrest as Gordon's divide becomes evident over the next few years.

His tactic was to build up the benefits (which include unsustainable public sector pensions) dependency culture in order to secure support for his party.

Yes, Geoff. Why is there no accountability or (performance-related negative bonus) in Government? But how to revolt in a middle class way?

There is no magic about pensions - I know, I was a pensions solicitor for 20 years. They are just tax-relieved savings vehicles. Having said that, they are very tax-efficient, so anyone who turns his or her back on pension saving is going to lose out.

As in a lot of other fields, if you want something done, do it yourself. If you are one of the lucky few to be in a final-salary scheme, sit tight and cross your fingers that your employers don't go under. If you're in a money-purchase scheme, transfer the fund into a SIPP and manage the investments yourself. When you decide to draw the pension, don't buy an annuity, take pension drawdown.

If you're reading this you're probably a private investor anyway, but with a little experience you should be able to make your SIPP grow faster than the other pension providers like Scottish Widows or Standard Life. My pension savings (SIPP, ISA and share portfolio) are currently running at 20% growth a year. You need courage and conviction, and you need to do a lot of research and monitoring, but you won't hear me moaning about poor pension performance and the cost of annuities.

It's a matter of common sense that you can't make pension savings for 30 years (nobody saves in their 20s) and then expect to retire on an annuity at 60 and live to 95. If you don't want to carry on working till you're 75, you'll have to take your fate into your own hands. You are meant to get wiser as you get older . . . .

@Maverick - 20% annual growth per year? I thought law requires precision and perhaps it helps if you explain over what period that is measured? (The market had a good year in 08/09/10, but flat in 11 more or less)

Another risk with a pension saving is that it is a sitting duck (e.g Argentina, hungry)...

Yes all very valid comments both pro & con but I saw all this coming in the early eighties when until Mrs T was elected and made transfers avaiable of your pension held by your previous employer. But look at the pension suppliers performance and especially the likes of Equitable Life crap. Other scandals again like endowment mortgages have milked the pot and tax payers are bailing out banks now. Yes save 15/18% if you can but I bet the majority of contributors to these comments are pretty well protected, why bcause they took charge of their own future matters. Now that is often the difference between 'them & us!'

Well I think revolt in a 'middle class way' is not the answer, the Liberty & Livelihood' marches proved that and even though they are not the 'democracy' we are the early, peaceful, demonstrations were not effective in Syria and Egypt. We are not called the silent majority for nothing, However, being as the widened middle-class is constituted now by many people in the Civil & Public service that was created by the Labour Government's back door move towards the socialist ideal of full employment. Apparently 75% of jobs in Northern Ireland were in the state sector or in support of it, a higher percentage of jobs than were dependant on the state in Communist Russia, the price of peace and 'full employment'? It is amazing, how the 'big listen' is going on about the NHS and the Justice system' but not addressing the subject of this string. The problem is as result of succesive Governments mis-management this can has been kicked down the road for too long, everything is geared to the electoral cycle including the Government cuts which, as foreshadowed by the IMF if implemented will pave the way for tax cuts and incentives probably in front the next election which is why the Conservatives will go full term. Bitter pills need to be swallowed. Why can't the Government issue a tranche of index linked Gilts at a good spread and not limited by a paultry amount? Well because they know inflation will continue to rise, and they don't want those with money spending it and create more 'demand pull' inflation. It suits them at the moment to have low consumer confidence and demand to increase the savings ratio and rovide cheap and leverageable capital to the banks to meet the revised Capital Adequacy requirements. Short rate they can control via the MPC the markets will affect long rates which is why we have what lokks like (on the surface) radical cost cutting to keep the IMF happy (working then!) and the markets off the back of long end of the Gilt market. Also the Government doesn't want to compete with the banks and insurance companies because of the obvious and mutual conflicts. I can't go on. but I could, as I am getting more angry and will probably get a visit from 5 or special branch for incitement to riot!! Face it boys and girls it's a screwed pooch! And Maverick. great post can I get you to manage my, savings, investment trusts and pensions please, all of which are in cash going backwards as i am too petrified to committ them even with 38 years of trading experience....or maybe that's the reason?!

Like Graham, I too feel a trepidation for the future. The rational reasoning process of Science, embodying the disciplines of Medicine and Engineering have brought about generally the great improvement of the peoples' well-being and material welfare, and a consequent growth of the world population with according demand on natural resources. Thus not only personal financial provisions for an extended life expectancy is problemmatical.

In this country, as Graham says Finance - which is essentially the enabling agency of barter - has been allowed to let rip and do its' own thing without a proper overall regard for a fairly balanced economy. As I understand it, growth of the economy only comes about as a result of human toil and enhanced methodology, people make things and provide services for people ( themselves) to purchase and improve their lot. In this endeavour, the jobless are a burden - not necessarily of their own making - and an extended life expectancy an added consideration. In all of this cash is the life-blood and without an adequate flow there can be no growth. It is for Finance to ensure that the cash derived from the toils of the populace are fairly put into circulation to enable it. In a capitalist society this demands the exercise of a better general morality and regard for the overall economic equation than obtains at the present time. Of course it is for Government to make the rules to bring this about; we need from them, LESS MICROMANAGEMENT by the PUBLIC SECTOR with its consequent high taxation, and more attention to the moral question.

As things stand, too much cash is going into 'a black holes' leaving insufficient to engender growth and individuals' provisions for the future.

Sorry if that's all a ramble!

Aussie Dealer - I thought it was Poms who whinged . . . . . . !

Steven22 - 20% is this year. Just because everything else is moving sideways it doesn't mean your portfolio has to. (Like buying Hamworthy two months ago and finding that it went up 15% yesterday!). The FTSE 250 is showing much the same gain. If you concentrate on the FTSE 100 you miss most of the high performers. I don't understand why my SIPP should be a sitting duck, or what it's got to do with Argentina - can you be a bit less cryptic? (The ducks I've seen in Argentina don't fly, they run across the top of the water - now is that cool or isn't it?).

Graham Walker - We could do with a paragraph now and again! Do you speak the way you write? It's a whole different ball-game managing money for someone else - I have enough problems running a SIPP for my 23-year-old daughter (like I said, those in their 20s don't save, but she'll be grateful when she reaches 60). To advise you I'd also need FSA approval, and as a solicitor I've had more than enough bureaucracy for a lifetime, thanks . . . . .

"the 'big listen' is going on about the NHS and the Justice system' but not addressing the subject of this string." - GW

- Absolutely. ... and this is probably because of the immensity of the pension issue. Maybe they think that NEST will fix it. I don't think so, have you seen the requirements for investments within NEST?

"LESS MICROMANAGEMENT" - aeo

- Absolutely. This is stifling small businesses and wasting teachers' time.

Returning to the central thesis of the Scottish Widows propaganda: 'People aren't saving enough for retirement; whose fault is it?''. My answer in addition to what I said above can be stated in 4 assertions:

1. The system as a whole is attempting to pay pensions out of a wealth creating process that runs economies into debt*;

2. That debt has become so large that the western world's financial system has become a sort of ponzi scheme, by which I mean that there is no realistic prospect of the debt being repaid, it can only be rolled over;

3. The crisis that will hit us next will occur when we realise that not only the principal is unpayable, but the the interest also cannot be paid;

4. Our financial leaders like Mervyn King know this, and yet nobody powerful is even discussing what we need to do to change the fundamental basis of the way we create and manage money.

If my assertions are correct the answer to Scottish Widows must be: 'It is not the fault of individuals. It is the fault of the whole financial system that you yourselves help to perpetuate.'

*Hattip Michael Hudson via John Mauldin

@Maverick,

As you said you are in the pension industry, I thought you have heard of Argentinian and Hungarian government nationalising pension? You can't touch the pension until you are 55/60/65, so, it is a sitting duck if the government decided that it needs some quick cash.

Maverick, no I write the way I think! A blog is not an excercise in grammatics, largely it is a forum for people who don't feel they have a voice to vent their thoughts and for it to be read by people suffering the same dilema, the string proves it!!

(Para) Both my wife and I held failrly good (ass Dir and above) in the City, we both left more or less simultaneously and bought an hotel. The first year in my wife said, 'what are we doing about pensions' well she was a commercial banker, my reply was 'we are living and working in it' we sold that property six years later for nealry double what we paid for it and exceeded our turnover projections by two and a half times in our best years. Since then we have not put a penny more into pensions and instead built up a buy-to let portfolio UNLEVERAGED before the critics start in, and that is our future. The remainder of the funds under management are either in a SIPP, cash or life level funds.

(Para)I admire your application to 'stock pick' the 250 and to generate those returns, it is a shining example that if one applies oneself the returns are there. BUT even though the input of this string is quite high how many of the participants would feel qualified or confident enough to stock pick on a 'micro' level, let alone take the time to do the necessary analysis. It is the thing that seperates 'them from us' as someone said.

(Para)This brings me back to the 'why are we not on the street protesting' thing and the theme of the string....answer in one 'complacency'!? We are just beginning to feel the effects of the indifferance that emotion has inculcated as the post second world war (as a trend) boom has to be paid for; during a period of time when the nanny state has ensured, through socio-economic engineering, wealth creation (or the impression of it) that we are all better off. The entrepreneurs by (on average) strong GDP growth, the employed by a fairly benign tax regime and the creation of the impression of wealth by wider home ownership and associated increasing house prices, and the feckless by a over generous benefits system, and of course universal health coverage and social safety net for all.

(Para) However the piper is having to be paid, slower GDP growth, worldwide, another jobless recovery, further debasement of the manufacturing base, and I would project a diminished saving ratio. I am impressed you have got your daughter into a pension at 23, I presume your circumstatnces allowed her to leave Uni without any debt but at 20% returns I guess a student loan would look like a cheap way to fund an early pension!

(Para) The fact is I don't feel we can save enough with the way things are. The only point most people feel in working is to provide housing, food, clothing and the luxuries in life, which they feel, is the only thing that akes working worth while. The luxuries always grow, to one degree or another, as the income grows. We have never spent more relative to our disposable income, why because we are being doubly penalised for saving by inflation and artificially low interest rates. So I shall buy another Classic Motorbike, another hand-made shotgun, and other such limited supply items and hope that (as has been the case) they cotinue to outperform the indicies (FT250 excluded) over time and enjoy them at the same time.

(Para) I hope the use of wider punctuation helps you to follow my argument if not best stick to 'Twitter'. And I was only kidding about managing my money I am sure you have your hands full!

There's a wonderfully simple solution to the pension crisis. Stop the compulsion. Stop the tax bribes. Let employers pay a full wage to employees

and not themselves be forced to top up pension fund contributions and deduct employee contributions. Keep the NI contribution to fund the SRP for everyone at about its present subsistence level. No more. If you want a richer retirement you use your own surplus income to invest on your own behalf through your working life.

There's a huge, sick, frothy "industry" grown up around tax bribes and employer- and employee- compulsion. Time to treat us all a grown-ups. And to get the financial parasites who feed on "tax-breaks" to get proper jobs making things themselves.

We'd be better off as individuals. And better off as a society.

I was just in the process of thinking how to reply after being accused by the elegant Tony Peterson of being a scamster when his last reply came through a few minutes ago. It now becomes a tad easier to write. I'm not here to promote myself, rather, to get an idea of what informed investors think about the goings on in the industry. In short, I agree with most of the frustrations of investors as the middle men and insurance companies have made vast sums of money. But there are some interesting comments to be highlighted. . .

Tony Peterson represents exactly how doctors describe “Wikipedia educated patients”: a little knowledge can be very dangerous. Good that you’ve done well managing your own investments, but to be haughty and insist everyone should manage their own shows a complete lack of understanding of the wider public. Even if it is not the intent, the tone is also derogatory towards the wider public by saying “if you want a richer retirement you use your own surplus income to invest on your own behalf through your working life... And to get the financial parasites who feed on "tax-breaks" to get proper jobs making things themselves”. Just in case you haven’t realised by now, if there are no tax breaks going in, there can't be taxation in retirement. Tax breaks encourage savings as Maverick points out and people are not saving because of a lack of trust, understanding and affordability.

I’ve met many people like Tony Peterson who know a lot, think about money constantly and feel they are always right . . . the fact is they have very bored housewives, if indeed anyone.

@Maverick. I am shocked at you being a pension lawyer and coming on here suggesting people should contribute to a SIPP, manage it themselves, avoid annuitisation and go into drawdown. You redeem yourself somewhat in a later comment by saying you are not FSA authorised, but you have highlighted what many solicitors and accountants do for their clients. They pass such comments when they have no right to do so. What you’ve said is simply dangerous and embarrassing. Again great that you are making 20% and the like, but no return is guaranteed . . . it is always a gamble.

What I said was that the future will be down to the individual. They will have to take better control of their money and seek guidance where appropriate. I say this because even fund managers seek advice because quite simply, even they don’t practice what they preach. Even these multi-million earning people don’t know how best to save tax. The very wealthy who are rather busy, simply do not have the time to manage their money and (quite rightly) will pay professionals to do so. What they want is to enjoy life and not worry about what is going on with their money. Only by promising unattainable events such as constant alpha and the next best thing will only alienate people when (as Lehmans proved) the unexpected happens. It’s best to keep things simple.

So, TA, Joe Public is so stupid that they need your (generously paid) assistance.

You are insulting the intelligence of your fellow humans. And patronising me. This thread has shown convincingly what a shambles pension provision has become in the UK. You touted the utter lie that you can provide a "scientifically proven model" to enrich your clients.

What are your scientific qualifications I wonder?

Joe Public IS stupid. Just look at the voting record for the last umpteen general elections. Just look at the percentage that read tabloids or do not read a newspaper at all, even online. Just look.

Tony is right about the tax bribes and compulsion. Very few people pay enough income tax for it to make much difference to the poor and the rich need no subsidies. Compulsion is useless when the problems are low incomes and means tested confiscation.

My my TA, aren't we the cocky one, I gather Tony Paterson was writing in general terms about things as they are, there is no need to take umbrage; but as the saying goes, if the cap fits then wear it.

As to your personal analogy regarding the derogatory comments by doctors' references to Wikipedia education, I suggest those that make them feel their assumed omnipitence threatened, and that patients should should accept that they are just sheep to be tended in mysterious ways - I have encountered this. Not all doctors are like this thank goodness, but the same saying goes.

No one has a mandate for all knowledge in any field of study, those that are intelligent and motivated enough to read, wherever the texts, will do so and draw their own conclusions intelligently, seeking professional guidance when necessary.

I too was a victim of Equitable Life and its hard sell of a with-profits product not properly thought through by them (or perhaps it was) and my wife was taken in by a Scottish Widows sort of speculative bond being sold at the time by LloydsTSB financial advisers who led her to believe her capital was guaranteed, which in my opinion with hindsight should never have seen the light of day. Such won't happen again - fingers crossed -in my opinion it always pays to second guess - as far as one is able - professional advisers of any description.

TA might like to know that now that my friends and neighbours have finished falling over themselves laughing at his description of me as "elegant" and "haughty" he might like to explain why he quotes Pope's famous couplet without taking the trouble to complete it. He cannot, because he most certainly has not himself drunk deep of the fount of knowledge. He just hopes. like all scammers, and like the boiler room fraudsters, that we don't hold his self advertising up to any critical scrutiny.

I just want to know what evidence he has for his "scientifically proven model" for personal enrichment before I use my pitiful Wikipedia-fuelled (actually there's graduate and post graduate paper from all over the world backing me) to tear his claims for scientific backing into little shreds. He is an ignorant, arrogant, and stupid individual who somehow thought he could get away, anonymously, with a little self advertisement through this thread.

TA or is it FA?

Thanks for providing us with a good laugh on this thread. Looks like you have been preaching to the wrong people. judging by the replies.

More and more people are catching up on the idea of making their own decisions where to invest, even if they do choose to use passive investments like trackers. As time goes on these new investors read more articles and gain knowledge to help them diversify if they so wish.

I am so glad to see that commission charges for financial advice is being ended and replaced with fees only. Maybe the newbie investor will wake up when he sees the amount of fee he has to pay, also discover investment trusts with much lower charges where alas no commission was payable before to advisers.

For those who have not got time to learn, or don't want to learn investing then seeing a good decent Independent Financial Adviser is worth it. I chose never to take advice from the start because IFA clients portfolios are reviewed on average just once a year.

It is a good thing that SIPPS are here now for people to manage their own and avoid the unbelievable charges levied by advisers, pension companies, fund managers etc that take such a high percentage over the whole term.

Now then Tony Peterson, don't go all insecure on me. If you actually read my comments I didn't say Joe Public are stupid - you assumed (again wrongly) that I said so. You also assume that my "scientific model" to be a lie. What I actually said was that there has been scientific research done whereby if you follow a model, you "can make money over the long term". Your inability to be impartial only highlights your own weaknesses and aides my statement that the "wider public" (ie. those who don't have your knowledge or time) would do better by finding a professional they trust. At the end of the day, this democracy allows people to decide for themselves. There will always be people who need guidance and those who are good enough to DIY. What is not good is to think that just about anyone can, or has the interest in, investing and managing their own money.

As for my qualifications, I am both a Chartered and Certified Financial Planner, of which there are less than 100 in the country. My background and qualifications are not what is important here - it is impartial opinions of people who are managing their own money. I simply came here to see what other people think of the mess which you rightly pointed out.

@an elder one - please check Tony's comments about a "discredited 'profession' " before accusing me of doing so. What some doctors joke about is when patients see them, having surfed the web and demand a particular medication.... they say that is dangerous. I can see what they mean.

@Tony - funny you think I'm bothered about your neighbours not understanding sarcasm or hidden acceptance of the latter! Funny that Tony!

"Ignorant, arrogant and stupid who is self advertising" - is that me or you you are describing there Tony, because not only have I not mentioned anything about my company or theory (in detail), only you have acted in that description as any impartial person with grey matter will confirm.

Your personalised pitiable comments only confirm you are actually either not very successful, got a lot of time, or indeed have a very bored housewife!

Night night Tony, you are not the type of person I need to convince about the science of investing because you (obviously!) know so much more than all the academics.

@TA - Excellent - may I just ask how many % of your net wealth comes from capital gain through your investment decisions and how many % of your net wealth comes from remuneration for giving advice ?

(The other day we have Roubini who predicted all the crashes and then still heavily invested in the stock market before 07 crash....)

This is a genuine question.

TA - There is one big difference between you and me - you are paid to give investment advice, and I was paid to give generic advice. I sold nothing except my own expertise and (ahem! ahem!) wisdom and common-sense. I had no axe to grind. All I can say is, you qualify as a lawyer (not easy), practise in pensions for 20 years, and then see if you don't come to the same conclusion as me. The fourth line of the Pope quotation is, "And drinking largely sobers us again".

Incidentally, the guy who wrote the textbook on wills and intestacy died intestate . . . . .

Ask the Equitable Life pensioners, in the news at the moment, whether they think it is a good idea to entrust their pension savings to an insurance company.

I shall hold to my opinions till the day I die. And then my two daughters will get my pension fund, less whatever tax the government is charging at the time. If I live for another 20 years and I can grow the fund (after pension) by even 10% a year, it will be over 6 times as big as it is now. If I'd bought an annuity when I retired, my daughters would get nothing. TA, I take it you tell your clients that . . . . .

My! my! so much invective, why involve yourself in debate of any kind if the eventual resort is to personal criticism.

The general public IS stupid there is no shadow od a doubt and when one understands that 50% of the natio only has £500 in savings I don't think TA is wrong, they are not the ones writing on this blog. The string clearly shows input from a variety of financial backgrounds and I don't suppose TA or Maverick are earning insignificant sums. I have a fairly good IFA now, but I have to say he is the best of a bad lot, as the similie has been made there are good and bad IFA's like there are good and bad doctors. The problem in both cases is experimenting in both can have significant consequences many of which may not be realised for many years.

As I have previously stated, with 38 years of investment experience I am incredibly wary of committing my remaining reserves to any market or fin vehicle as at 58 I havn't got time on my side to wait for it to come right....or not! Who has time to read all the small print, something both lawyers and institutions offering investment advice want you to do.

I have been caught several times, Morgan Grenfell 10% return vehicle, meant to, on a 80/20 equity to option ratio headlined that return, when the market kept going and the puts dragged on the return the 10% return was ade up by........paying you out of your initial principal. 2) 27 years into a 30 year endowment, despite paying in regular premiums the fund was going backwards, I phoned the company (Sun Life) and the two year old on the end of the phone ensured me that I would get a terminal bonus on surrender of this policy as it had under five years to run, this was a specific answer to a specific question, I was even told thatif I did it before a certain date I would get that ears terminal bonus rate which was scheduled, due to the reducing performance likely to continue to decline. In the surrender letter I even insisted that they did not redeem the policy unless a terminal bonus was tobe applied. Guess what....they redeemed the policy did not pay the terminal bonus, could not trace any recording of the conversation even though I gave them the date and time. On challenging on the basis of the letter they offered to re-instate the policy and run it to maturity but with no guarantees of a terminal bonus or redemption value. 3) I bought into SL level fund and agreed a fee split with my IFA (somebody we were close enough to go on holiday with) he said he would pay this when the comm came through ad cleared through the accounts (£3,000). Guess what....he didn't pay it, one f his wife's clients went into receivership owing her £10000 for goods and he couldn't afford to pay it.

Now I am not either a financial naive or a shrinking violet, and these are just three experiences of mine, Maverick/TA how are the general public meantto have any faith in the profession you both serve, on whatever basis you get paid?

I know have a parallel business as a business coach and consultant. Something I scorned until the way in which I found it could help some businesses and people, who, whilst being very good at their particular field can't always resolve some issue without guidance. My fee structure.....nothing! Why, I turn down more work than I take because I give the first consultation free, if i don't feel I can make a material difference to their firm in either a financially quantifiable way or in a definable or measured way then I don't take it. If I can we agree the objectives and bench arks then I get paid. Default rate on payment....zero, lots of happy clients.

In closure I do feel that it will be much slimmer pickings for IFA's when and if their remuneration is based on results and not commission. fee disclosure has gone a long way to disclosing the sums involved for IFA's and the impact it has on performance. Also SIPP's aren't free, even though as stated my Sipp is with James hay and they are charging me .5% for the priviledge of having the money parked in a bank, no income even though a percentage of the money is some king of term deposit or rolling CD's to cover withdrawals. It is a corrupt, greedy and unscrupulous business, I am glad that I am not any part of it any more other than it would seem another hapless mug!!

TA, hell's teeth! you are a touchy one, I accused you of nothing; I wrote if the cap fits then wear, thus leaving you to decide. As far as those doctors are concerned that are confronted by patients demanding medicines, the case only becomes dangerous if the doctor succombs, in which case he/she might find themself struck off.

Come off your high horse!, I would guess most people here are qualified in one way or another and able to think for themself, mine is chartered engineer retired.

TA, I think we are all still intrigued to know of your 'scientifically proven model' for making profit; in general outline, that is; it wouldn't be Monte Carlo Method perchance? or have you already been asked. That at least is mathematical in nature, so remotely related to science; can't think of anything else of a scientific nature connected with making cash out of the market with all its' randomness; you surely don't mean charting?

Graham Walker - If you're 58 you have 29 years to see it "come right" (on the current longevity tables), so you should be 100% invested in equities. I'm 61 and retired, so I have "bitten the bullet" and put my money where my mouth was, if indeed you can do that while biting a bullet . . . . .

At least if you do it yourself you've only got yourself to blame. But I imagine some people wouldn't like that.

Actually I prefer to D I Myself and am prepared to take the blame. I feel more annoyed if I have asked for advice and then the investment plummets. Did that with Financials and Commercial Property. Have been much happier with my own decisions. On the same subject, I think it is daft to expect IFAs to be able to forecast the market. They are, however, excellent (usually) at ensuring that one has considered all the options and evaluated all the risks when investing and making life changes such as retirement or on diagnosis of serious illness and so on. There is a lot they can help with, which does not relate to actual choice of investments. I think that they are used the wrong way, by many, if you will excuse the expression.

WOW, this is a long one! There certainly feels like there's a lot of testosterone on here. I see now why people blog annon!

I'll admit, since posting on here like age's ago, I haven't read all the post's, but some in particular have made be chuckle.

must remember to switch off the, let me know when someone posts e mail alert. There's more of these e mails in my inbox than e mails for buying Viagra!

The majority of IFA's dont post on here touting for business, they know if your reading these publication, the likelihood is you are interested in finance and prefer the DIY method.

I love what DD has said, I'm an IFA and I love helping my clients. No crystal ball here.

I for one am glad commission is going, for the majority of IFA's it wont affect them, they are already charging a fair fee for the work that is done. The one's it might hurt is those who are still taking their 7% up front! Yuck.

I really feel for people who got smashed by their pensions, my Dad being one of them. He was told by his Premier bank to switch out of a pension with a GAR of almost 10% :( I was 12 at the time so not my fault this time!

Now play nice with eachother !!!!

We are banging the big drum here but let me give my views on why folks dont save

1 Tommorow is a long way OFF

2 Pensions Beoreing

3 Lack of Education in all things money

4 Pensions to complicated (SEEN AS A TAX DODGE) and sold as one ??

5 Bad Advice

6 Lots of bad press

7 Consumer imige of Pension Co ie equitable life charges ect

8 Stable employment or lack of it

9 No good company pensions in genaral

10 Whats the point of saveing when you lose the benifits ie Council Tax benifit ect when you do get a pension

We need a total rethink and a clear path forward especialy for young folks under30

I belive this is not complicated everyone should be forced to save via PAYE

or Self Employment

Funds woukd be paid into three things

1 Direct Stocks and shares top 100 companies as a tracker

2 Isa funds used

3 Prumium bonds

3 Cash accounts

at the end of every year Tax Relife awarded and the Customer can use it to buy more funds in any of the above of there choice

25 % in each of the above funds

THe provider of the above would be the Nationl Saveings not pension Companys

clarity and enforcment is the way forward if we are going to get anyone to save

we have gone down this track of lack of pensions for a very long time it needs to change

I know this wont fix all the problems and there will be faults that im sure will be pointed out to me

But its a start we need to do some thing

Dislexic Landlord,

I agree that something needs to be done but whether it will in our lifetime....

If the UK was run like a third world country, ie no benefits or automatic government pension then yes, we may see an increase int he percentage of savers.

What we have to bear in mind though as things stand is that for a lot of people on minimum wage or not much more, and with kids then they may not have the spare cash to save for a comfortable retirement.

I had not saved one penny for retirement till I was 34 apart from 4 years in the company pension scheme (first one I kept running)

The idea of forced savings (from salary) is a decent idea on the whole if wages were enough to cover living expenses plus this. However I would not be happy contributing to a cash account and premium bonds. Tax relief would be good but even better if tax-free on the way out too. Probably more things to add but it's a lazy day today and my brain ain't in gear yet!

Dave you raise an important point affordability

it all comes down to cash in the end

regards DL

Dislexic Landlord - You're right in one respect - "lack of education in all things money". Take a class of Year 10 kids and ask them to work out on their calculators what £1,000 would be worth at age 65 if it grows at 5% a year. Then ask them to work out what it would be worth if it grows at 10% a year. The figures are almost unbelievable. Then tell them that the £1,000 is actually £1,250 and that all the growth is tax free. That what "pensions" means, and I don't think you'll find many kids who think those figures are boring.

Your solution is very like the Government's NEST (great minds think alike!), and the compulsion is one of the key elements. I am less happy about the Government's choice of investment vehicles, but the political cost of getting it wrong would be far too great for anything racier. Keep ISAs separate, so that the money can be used for a house deposit (hollow laugh) - you can if you like tip your ISA into your pension just before you retire and get the tax relief anyway, but that's looking too far ahead.

And Lorna - I know there's a tendency to blame some authority for everything, but the lack of pension savings has nothing whatever to do with the unions. It has everything to do with personal choice.

Macerick - the unions do bear a great deal of responsibility.

Income tax and NI start at a wage below the poverty level. And then we have to pay high council taxes out of net income. So lower paid people cannot afford to save.

If the unions had accepted pension reform when it was first mooted, then our taxes and council rates would be far far less, and we could have a far more realistic personal allowance with more headroom to save - and also making it more attractive to come off benefits.

But instead we have to fund huge pension accruals the like of which any privately employed person (other tha those on DB schemes) could never dream about,

And also the unions have pushed for more public spending and no cuts now, thus playing a major part in creating our current deficit. As a consequence interest rates are held artificially low to make UK interest payments lower, and to help inflation and low sterling eat away the debt. And so annuity rates are pitiful, and pension funds (whchi have to buy a lot of government stock) show poor returns. Thus saving is less attractive as one finds it almost impossible, accross the board, to beat inflation.

Jon

It is not true that it is not possible to beat inflation.

Six of my shareholdings are currently yielding over 5% (after basic rate tax) and most are committed to increasing their dividend by at least inflation.

These, at the end of last week, are National Grid (6.2%), Vodafone (5.6), Scottish and Southern (5.5) GSK (5.2) AstraZeneca (5.1) and United Utilities (5.0).

There are currently only two ways to keep your investment income above inflation. Index linked gilts (for which a heavy premium is now demanded)(or NS & I IL certs for small amounts) and shares. Nothing else.

Whose fault?

Erm...I think it's the Financial services industry.

Scottish Widows are in the same busienss as Allied Dunbar who took our money when we were young, but creamed off all the growth for themselves in charges.

Or maybe it's IFAs who take 5% or more of a lifetime's savings to advise on a move to new funds.

Or maybe the fact that the £58 per month only works if there is a projected level of growth whereas we are all seeing static performance and losses, so we know the cost of saving is being understated.

Maybe it's because we need not thousands, not tens of thousands but hundreds of thousands to get a pension so we feel a bit discouraged.

A quarter of a million delivers less than £7000 in annuity if you don't want it to erode to nil. So mayb that's got something to do with it.

Any suggestions, Scottish Widows?

Tony - NSI is limited - hardly adequate to save for a pension - as Paul notes the pension pots required for a decent pension are HUGE. Therefore in context my comments stand.

And your share investements might be giving a good yield now, but not generally over the very long term, remember BP? and the stock market can be very unreliable - was 7000 a few years ago !

My main point was that the over very many years Unions have been a significant cause of our current predicament and hence why people cannot and do not want to save. Just get a job in the public sector and spend all you want. At last we are just starting to cut back on this, but not enough by a long chalk.

Paul you talk a lot of sence

A lot of us were ripped of by the likes of Allied Dunbar Equitable Life ect and thats why i say dont do pensions through pension companys you cant trust them

and your right 250k for 7k income is not a great deal and if you die after a short period your pension fund is lost to your family

Low earners need to be shown a differnt way may be a larger tax relife on money paid in would be a start

but we need to think outside the box if we dont i would not like to see the uk in 30 years time

I have freinds now well past retirement age who cant afford to retire and i can only see this getting worse

Tony Peterson is right about inflation. You can beat it by investing in a sensibly diversified set of high yield shares. You can also invest for capital gains and take the profits. The performance of the FTSE 100 is irrelevant to a well planned portfolio.

Tax relief is useful for those who pay a lot of tax but of marginal use to those whose problem is paying the bills and feeding and clothing themselves. Low pay, underemployment and unstable employment are the real problems.

Jeremy - you clearly understand what I am on about. Thanks for your post.

Jon makes the point about the volatility of equities, which obviously frightens people. He cites BP. As far as I am concerned, he has chosen a ludicrous example.

Until the blowout my wife and I had made over £35,000 from a BP investment we were quite happy about. But once the blowout occurred, and the US was making idiotic noises about an accident its own companies were partly (or mainly) responsible for, we took our profits and shut down our position. We will consider buying back in if the share price for BP ever falls below £4.

You are also right about capital gains, Jeremy. Although the stock market is still down after a disappointing decade, we have had no difficulty in taking our full capital gains exempt profits from it every year. At the moment of our twenty holdings only three (banks) are down.

At the moment, though, for an investor wishing to even just maintain the purchasing power of his savings, there is nothing else but index linked gilts and shares. Fortunately, that disappointing decade has put shares at bargain prices. Please don't all rush in. Yet.

Dislexic Landlord --- The Government would raid it!

I'm in dispute and will have to go to the(USELESS ,OVERPAID, UNDERPERFORMING) F S A to ,almost certainly in vain,get redress from Prudential who after several years have substantially reduced my Pension on the Pretext that people are living longer and that returns on investment are lower.The truth is Prudential want to steal my money,I would like to know how much their board members salaries have reduced because of the above,some chance!This is why no one invests in Pensions,the whole industry is full of crooks.

I have already posted in relation to this.

In answer to the question posed in this article, I would say:-

1. The individual;

2. Insurers peddling policies;

3. Gordon Brown/balls;

4. IFA's (not all of them, but a large number);

5. The FSA.

The top three culprits are 1-3.

The individual possibly because he/she has not been making a sufficiently large provision.

Insurers because of the commission they pay upfront to the peddler and then an annual commission thereafter for the life of the policy and the excessive "charges" they load onto the policy before they calculate the profit, and out of which they take the excessive salaries of their managers and directors and unmerited bonuses.

Gordon Brown/balls, for the raids on what they consider to be the "rich" pension pots, whilst leaving totally untouched their own pensions. As a result of these raids many well funded pensions suddenly had black holes, even the local authority pensions for which the local authorities are now tapping the taxpayers to make up for the insanity and greed of Brown/Balls. The major responsibilities here, as well as Tony Blair and the Labour MPs for allowing this robbery. As a result of their actions many pots were shrunk by as much as 50%.

The IFA's and FSA to a lesser degree, the former because they do not keep track of what is going on and the latter because they do not keep their members in line, allowing them to get away, in some instances, with murder, which the courts would not. In most instances IFAs are more concerned with their commission and the FSA for turning a blind eye to the excesses/wrong decisions of IFA's.

At the time that my pensions were started, SIPPs were not available, otherwise I might have gone down that route so I was stuck with insurers who played their usual silly games of valuation months after the policy had matured, and during which I lost more than £30,000 when they "followed the market".

As insurers invariably invest in the market, to a degree the market affects the value of the policy at majority. The market is a fact of life and we cannot blame the market. That would be like complaining that the UK should have a semitropical climate and blame the sun and the orbit of the Earth.

If enough is not being saved, that is usually the fault of the individual. However changes do come along which should result in additional savings being made.

Given the size of the theft by Brown/Balls, and their cronies prison sentences of not less than 100 years in each instance, no chance of parole, even for medical reasons.

The Equitable Life fiasco shows just how "caring" the aforementioned were and certainly Labour MPs were more than happy to see the "rich" robbed, there was more money for expenses to be filched.

End of part rant.

PS, Now I see the basis of some of Maverick's 'sdvice' and he will in turn understand some of my observations of the FSA, particularly the ombudsman section who employ people who really have no clue of what they are doing and should be using people who have legal experience. After all you do not send a plumber to prosecute/defend criminals, plead civil cases.

@ geoff evans - a tad unfair rant there to say everyone is a crook and that prudential are stealing your money . . . annuity rates are more likely to be the answer you are seeking. but you are right about the FSA

eg. just after the tech bubble, prior to the biggest growth period in ideal conditions, the FSA told all with profits managers to move out of equities and into fixed interest. a bit like "sell when low" like gordon brown (who will go down as our worst prime minister ever) did with gold. thanks to that stroke of wisdom, most with profit funds missed out on the majority of the growth. what is shocking is that the managers had little idea of asset allocation even then.

@snoekie - nice summary there. it is commission and its culture that caused the majority of the problems. advisers now say that the banning of commission will mean the mass affluent will not get access to advice as they will not want to pay. what do you think about (the ordinary person) that?

a SIGNIFICANT problem comes down to values about money. many parents are spending what they don't have in order to keep up appearances. sky TV is more important than saving for a child's university fees. let alone retirement, many haven't even thought about what might happen when they need long term care. "living for today" is mainly about affordability, but a significant part is played by a breakdown of values around money. did our grandparents struggle so much?

what this country needs to do is to crack the benefits model. is it any wonder that those who are having the most kids are on some form of benefit? this is a terrible judgemental attitude to take, but i see no recovery unless harsh decisions are made. the benefits system is simply anti-evolutionary, and science says that this process can last only to a certain extent prior to there being maximum disorder.

most people don't "buy" future savings - they need to be sold to. that's what the man from the Pru did . . . because he was paid per sale by commission. now that those days are (sort of) gone, people need to be forced to save in a way through the NEST pension schemes and the like. if not, why should the tax payer pay for their irresponsibility. this fact (that most people need to be sold a future) is what many have missed by saying "its ridiculous to enforce savings". yes a pension can be good for some, but if doing so, there are many pitfalls (charges, investment style, funds etc.) that makes them inefficient, and should can be addressed.

the FSA's duties include educating the public as well as ensuring mismanagement doesn't occur. it appears they are still learning, at our expense...

There is an error in Primex's contribution to this thread. He claims that the shareholders of LTSB were not consulted. They were. At an EGM in November of 2008 the "shareholders" voted over 90% for the merger. I know. I was there.

The "shareholders" supporting Blank and Daniel's insane plan to rescue a terminally ill bank in the middle of a credit crunch at a PM's behest were of course, not shareholders themselves at all. They were fund managers. After (as Blank admitted at the next AGM, being fed and lubricated and "explained to" by LTSB directors. I did the best I could, taunting the directors that they were in danger of becoming the first bankers since 1929 to swindle themselves. Which, at Blank's direction, they duly did, paying £1.73 a share for their full open entitlement which they could have bought in the market at the time for about 90p.

Does anyone wonder why I am angry about the financial services "industry".

And by the way, I am still sitting on a story I have never been able to get into the public domain about corruption during the Thatcher era. Does anyone want to know?

I think that too many people just are not aware of the situation that so many people, especially the young, find themselves in these days.

Take a young person in their early twenties earning the minimum wage of £5.93 per hour working 40 hours a week that works out at £237.20, less tax and insurance.

If they rent a room in a shared house, that costs around £100 per week.

Not much left over to pay any other bills, feed and cloth themselves.

A pension? They wish! A holiday? What's that? They can't even afford to take the bus to work. If they are lucky they can afford a frugal night out once a month.

A young chap I know is always trying to get a few extra hours of work each week, but he doesn't often get any overtime these days.

From this October the basic minimum wage goes up to £6.08 per hour. Or for 40 hours that is an extra £6 per week less tax and insurance. With a bit of luck that should just about cover the inflation rate increase in their rent.

Everything has got out of kilter in this country during the last fifty years. Anyone doing a honest job should be able to afford a home of their own and be able to raise a family.

I'm glad that I'm on my last quarter of my life!

Bankers. Regulators. MEPs and MPs. They have all failed the people of this country.

dont always look at the unions look at the parasites at the top of the goverment creaming it and flooding the country with cheap uncapped uncontrolled labour.dont forget the take overs then shutting final salary pension schemes.dont forget the selling of of all the countrys natural assets -water.oil.gas.coal.to foreign companys and the goverments that have waisted money for 30 years and keep saying it was the goverments fault of 15 years previous .look at the law system that has gone sue mad. health and saftey gone mad making thousands of jobs to stop the sue culture again also killing british competiveness.every job should now go to a british worker gorden brown well said and the doll will go down.uni coarse that should have been apprenticeships not debt earners for the young and greed for the universities

and buy to lets land lords. back to basics stop making none jobs or making uni coarses out of apprenticeships .we need leadership not ex law people.at least magi would not have allowed the country to be invaded and the waiste that has gone on in the last 30 years.some one please save us from the clones

AC Wiltshire

Too true. Most contributors seem to have no idea of what poverty wages do to people. The idea of saving is a joke.

TA

Are those who advocate removing benefits from people with too many children willing to adopt them or pay for orphanages to do the parental job? Maybe they will manage to pass by on the other side of the street when the children die of starvation or are sent out to beg, steal or prostitute themselves? Perhaps they think the poor should be neutered? Are you sharpening your scalpel?

Jeremy - we stop them being born - it's that simple. We and all life is the product of successful genes which cannot see the future. But we have the remarkable power of understanding the consequences, although still being 90% emotional animals it is hard for common sense to prevail.

We are like locusts, eating away the resources of this planet and destroying all ecosystems on the way. It is already far too late to mitigate significant damage, but we need to reduce our populations fast, especially with growing expectations in the standard of living in developing countries.

So it is not a case of rich and poor - all women with 2 surviving children should be neutered. But even this will not be enough. China showed us the way with one child maximum per woman.

OK - it will be tough and contrary to many religions, but these are all the products of emotions, not facts, and we have to overcome our emotions. If nothing is done, then there will be no Citywire or pensions let alone saving as the world falls into starvation, mass migration, war and suffering.

So let us not be affected by the thought of a starving child now, but let us face the reality and take action to stop millions starving in the future - not to mention the death of many species which share this planet with us, but have not caused the problem.

Anon 4, a lot of wisdom that many will not understand. Life ain't simple, and but for world wide support for Africa, Haiti etc there would have been millions of deaths if there were no reporting and massive support brought in (made possible by modern transport).

Prior to the popular papers/radio/TV and journos and reporters. there were many crisis and disasters not reported, it was natures way. We are saving many people who have then to be supported for a long time and they continue breeding, more mouths to feed, never mind the resources they demand.

Anonymous4

Yes, the planet is being destroyed by too many people. But forced sterilisation would cause wars that might damage the planet even more. There are parts of Africa where mass migration of people fleeing wars and natural disaster has stripped the vegetation (for firewood) and caused desertification.

I would like to see compulsory sex education, including contraception. I would like to see more education for all concerned but especially women as this seems to have the most positive effect. I would like to see every effort put into countering the propaganda of the religious maniacs who support unlimited breeding.

In this country I would like to see people paid not to breed. But there should be no compulsion and children should not suffer for the incompetence of their parents.

There is a theoretical attraction in the idea of only allowing those fit to be parents to have or look after children. Unfortunately there is no agreed definition of fit. Genetics is still an inexact science. Judgements on the moral character of potential parents and their financial stability are also difficult because circumstances change. Eugenics has its drawbacks for all these reasons.

TA, I am not saying ban commission, but the ongoing annual fee is too far, just like it used to be that estate agents charged and initial fee for letting a property, now they want an annual slice of the rent and another 'introduction' fee on renewal, but doing sweet FA for it (by the contract, which people stupidly agree to and the authorities stand aside at this abuse). They even want a slice of the action if the tenant happens to buy the property, although they had FA minus 50% input in relation to the transaction.

Like MPs anyone can set up with zero qualifications as and IFA, whilst doctors, dentists, accountants, solicitors, barristers, plumbers/electricians, surveyors etc etc etc ad naudseum must have the basic certificate and annual re-education requirements with certificates. Not so MPs, ministers, PMs or their advisors need any such qualifications or even annual re-education requirements, never mind annual 'licences' with attendant fees and insurance obligations payable. Frankly I doubt that any insurer would insure any politician, they lie fluently and in many instances are near total strangers to truth, a far cry from utmost good faith.

IFAs are in business and must earn a living, and if people do not want to look after themselves or pay for advice, they only have themselves to blame, at which point a degree of compulsion is required, provided they limit the opportunities for IFAs and insurers to abuse the money paid to them. An awesome, but not insuperable challenge.

We definitely need laws to protect us from the Brown Balls scenario (not forgetting Harman syndrome).

PS also from the Bliar type negligence/conspiracy

Some interesting comments following my (either or) rather judgemental conclusion.

It is not right to take choice away from people.

It is not right to create unfairness.

It is equally not right to create unfairness by exacerbating problems...supporting the weak through medication is what humanity is about. It is a divine quality to do so.

Supporting those who are irresponsible and not fit (for purpose in this context) will only exacerbate the problem and bring the entire foundations crumbling down. Inefficiency generally breeds the equivalent. Whilst it is inhumane to even think of harming others, supporting them simply causes wider problems.

Paying people not to have kids is not the answer. People should only be paid if they deserve so. Evolution will always find a way. Anti evolutionary measures will invariably result in a population correction which is alarmingly way over due.

Hence, it's better to spend what you have and enjoy life, after performing your duties and responsibilities.

@snoekie - Where on earth did you come up with the statement that anyone can become an IFA with zero qualifications? All that changed in 1986.

From 2013, an adviser will be either an independent adviser (IFA) or Restricted adviser. Both will have to attain the minimum diploma level qualification. Most can't/don't have time to sit the exams so will leave the industry. The top financial planners will be either Chartered, Certified or both.

For your information, a Financial Planner is respected and trusted more than a lawyer or accountant in the USA. Over here, the solicitors and accountants will begin to look at the financial planner with envy as they have the strictest criteria to follow together with the mandatory continuous professional development.

The fear of many is that the financial planner will only be affordable to the wealthy who don't want, or have the time to, deal with all of their finances.

TA, the people I have dealt with have been of my age or older (ergo old codgers) and they let me down. I like to think that I can think and spot a con or a churn, and they tried that after 86!

@snoekie - ok point taken, but still they had to have qualifications...so you can't go around making sweeping statements!

Let me ask, these advisers you saw, did you pay a fee for them or was it "free"?

If it was the latter, they were simply acting in their interests as they had to sell you something to earn a living.

The future will be about people taking responsibility, seeking the best advisers and having to pay fees for advice. Seeing some of these threads I've learned a lot. It is obvious that many DIY people had been poorly advised in the past and they are missing the boat in some cases too.

They got their commission and more recently would have collected (big time) if I signed up, 1% on value and a tail fee on value, each year as well as an initial capital loss of £15k, which the FSA excused (no contract signed- still negotiating) because self administered SIPPs was not available he said. It was. That would equate on current values to just under £3k, half the current dividend income!

Fortunately I am not dependent on that. Highway robbery. Cynical, you bet.

PS, in court, on the facts totally liable, if facts established.

TA, you mentioned about many DIY people (investors) having been poorly advised... I only sought some advice just on the one occasion before I went Non-Resident so more to do with general assistance with which products were available for Non-Residents.

The Office I dealt with give advice on investments and tax planning, trusts etc and "did" deal with some expats. They would not answer my question regarding which types of investments were open to me, and instead tried their hardest to steer me towards investing 400k into an offshore bond wrapper through Skandia lodged with Kaupthing Singer Friedlander (Isle of Man).

That was 80% of my net worth and Skandia Bondholders with KSF have seen very little of their money back yet.

So glad that I ran out of their office as fast as my legs could carry me.

T A They are ALL,if not crooks,Feathering their own nests first.

You are wrong about G B being our worst ever Prime Minister,he did all the bad things while (prudent.sic.)Chancellor.Blair is the worst ever,he let him do it while sending all those young men to die or be maimed in wars they couldn't hope to win.

http://www.businessinsider.com/ireland-seizes-7-billion-from-its-pension-fund-to-boost-employment-2011-6

Now Ireland is raiding the pension fund... think NEST is safe? Think again...

came across this, maybe it will get us back on the right track.

https://www.schemexpert.com/Defined-contribution/Communication/Scheme-perspective-Engaging-younger-members

Steven 22--The British government would rob the state pension fund if they could,there's no honour among thieves.

Geoff Evans

What state pension fund? We have none. National Insurance Contributions are a separate tax which goes into the same pot as all the other taxes when government wants to spend.

@Geoff Evans - now now, don't go bashing all advisers because you've had a bad experience. Not all doctors are Shipmans. But yes, most have their interest first, because commission meant that they had to sell to earn a living. That already has changed for the majority of top advisers.

@Dave Duffy - totally see why you ran! Good choice as it sounds slightly restricted. But their model implies they were going to charge you for advice (15k) and then 1% to set it up, followed by another annual fee? Am I right in that understanding? Ok, if that is that case, out of interest, how much do you think would have been a sensible amount to pay them for advice about your £400k fund? I'm interested in finding out how much people think advice is worth...

Jeremy---Read what I said again,They would rob it if they could,there is none so they can't rob it. Not being confrontational,I'm sure we are all on the same side.

T A --You have become so defensive over the course of this debate that you need to become more objective before the debate can resume. Nevertheless it's fun to bounce all this around between the Retirees

@ Geoff Evans - your comment "They are ALL,if not crooks,Feathering their own nests first" does not sound objective at all....hence my response to you. If you find my above response to be defensive that's fine. But I doubt anyone else will.

To make a sweeping statement that the Govt will rob the state pension fund is just madness. This is Britain after all. Mind you if you think just because of Iraq, Blair is the worst PM, you are approaching alzheimers stage anyway! History will show that Blair was (apart from Iraq) one of our greatest ever statesmen. We should be proud that we had someone like that as the leader of this country. No one in a right frame of mind would suggest that anyone else in power would have said no to Iraq and Afghanistan.

@TA - what is the value of the work of a plumber who is asked to fix the tap but instead cause more water to leak out ?

What is the value of financial advice that eventually (or shortly after) delivers negative return (or a return lower than a safe and sound saving account?)

Perhaps IFA is among the few profession who can get away under such situation by simply putting the words 'your investment may go up or down' in the engagement letter or claiming to be innocent after selling subprime AIG bond to investor because the bond is AAA rated....

Hey Steven22, unfortunately every industry / profession has good un's and bad un's, It's the way things are.

Your right things can go up and down and for most IFA's we are not fund managers. I certainly don't sell myself as a fund manager / stock picker.

It's not about "getting away with it" as for most good IFA's they live off the recurring income they get for managing a clients portfolio (ISA's, pensions inv etc) and if the clients fund goes down, their income goes down so it's in all our interest to get the Risk right and place you appropriately and more importantly still, monitor and review the portfolio.

I think most people accept the volatility and most are now more reasonable with their expected returns and growth, it's just about having that conversation for me.

Agreed in the past it's been a bit of a band wagon chase, with Distribution, then With Profits then property, now It's all about diversification. :)

After all, if I do a crap job for my client, they will leave me :( I don't want that. I Loves mostly all mine. (the ones that buy cakes get a better service ofc!!!!! I'm not this fat from salad)

I agree, IFAs work with rules and software. They focus first on backside covering and weasel words. Then when they get round to advice it is constructed and worded to make the advice defensible. Understandable, given the mass of legislation.

But when it all goes pear shaped and clients suffer 40-45% loss as I did in 2008, they admit what we should have already guessed: they have no more idea than than the rest of us. Of course, they are right to admit this. That's why it's not really worth using them. It's a pity they don't express the same humility when they are selling.

I've paid for advice twice when I've been concerned I am having a tough job finding growth. The rules have been followed but I've had no benefit from it. Quite the opposite. On both occasions the advice has looked pretty worthless when looking back with the benefit of hindsight.

They seem to think they've done a service worth 180 per hour if they write to your pensions funds, request valuations, feed them into profiling software and pump them into a pre-worded report that looks nice.

It's Steven 22 I agree with. Input crossed with Martin, who I don't think understands the fundamental issues we have with his profession.

Once people wake up (and signs are that they are doing so) to the corrupt system that calls itself the "financial services industry", people like TA will have to retrain for jobs for which people have real need.

I would suggest he takes a course in plumbing.

@Martin - I think volatility is acceptable. Permanent losses aren't.

Let's face it - IFA does not have much more insight into the future than an average joe. Think IFA should stick to offering generic advice/product searches and financial education rather than selling products...

@steve22 - couldn't agree more, losses of 45-50% are unacceptable and I really feel for anyone who has suffered that. This just comes back to the question of risk? If your portfolio can go down 50% what is the upside? closely monitored portfolios have done really well over the last 2 years or so. I looked at one DFM risk level 6/10, 12 months 8.29% and 24 months 41.68% but from 1/2/2008, 6% average. So kept in, down and up she goes.

Your right, we don't have a magic ball, but like you we have an interest in this stuff that other people find incredibly boring. Reading the FT or citywire for some would be like pulling teeth. Reading fund managers reports, or webinars with them, meetings with the BOE rep for a economic outlook seminar. We do try :)

They pay us to do it for them. Unfortunate thing is, in the past, clients invested with an IFA, they have taken thier 7% upfront (eye squint there) and never gone back. Thankfully, that will change going forward with RDR.

@steve22 - an IFA can't get away with those words that an investment can go down...if it was not suitable in the first place. Their job is to identify suitability first, then select a product. You are right about expectations. IFAs should not be used if someone seeks growth. I get many people a year saying "so, I got x last year, can you better that and what is your record?" the result is always a polite decline as I have to manage expectations as well.

@ Geoff Evans - what a pitiable conclusion from you! you have just confirmed what everyone here has realised about you. You are a simple, uneducated half wit with no class. Then again people like you are needed here to keep up the entertainment!

@ Tony Peterson - now then Tony, I was wondering where you'd gone. Over to another thread advising people to DIY and that you're always right I see. Did I bother replying? Nah... we know never to try and argue with fools!

You will never be proven correct as there will ALWAYS be people better off than you who are far busier and more successful and actively needing and seeking advice. And paying for it. If you think our clients will suddenly leave us, then you are Geoff Evans' dad for sure!

Martin

I don't think the penny has dropped yet because you ask 'what is the upside?'.

There's no upside, it was bad advice. It wasn't highly risky investments running a serious punt. On advice, I moved out of of a 40/60 cash/equity split of my own choosing in favour of a spread across asset classes with varying volatility - some strong and stable to serve as a foundation, others more volatile to keep a prospect of growth.

It all sounded very sensible and carefully measured. But they all bombed. Commercial property was way overstoked but, "hey, it's stable asset class, I can talk my way out if it bombs." Bonds were downgrading like there was no tomorrow. But bonds are a defensible asset class. So the IFA says 'oh well, it was good advice but tough you lost nearly half of everything I put you in. Nobody could have known.'

This was not a bad IFA, he was neither fool nor knave. This is just what any IFA does. I expect you may even find yourself sympathising with his situation because you are probably exposed to the same risks of client perception and aware of your own limitations. But that's why IFAs are no use to us.

TA, you asked how much I would have been content paying? This was the first time I had ever walked into an IFA's office, but I did mention I would only be interested in paying on a Fee basis. They did get around to discussing what they would charge to arrange the Offshore Bond but as I said I legged it and left the money sitting on deposit.

My main point apart from the fact I would have lost the vast majority of the 400k, was that I would never, never put all my eggs in one basket. The IFA totally ignored my question about what sort of investments were available to an Expat and recommended me to just move the whole lot into cash inside the Skandia bond held at KSF, 6 months later...........All gone if I had been an idiot to accept their recommendation.

Just 5 weeks before our meeting there was an article in the Telegraph mentioning about how the Icelandic Banks were in trouble as the top 3 or 4 banks all owned a slice of each other (bit like the Zeros had in Split Capital trusts 7 or 8 years previous). This "Adviser" had not even heard of this article, I do wonder how much money he lost for other clients.

Not tarring all IFA's with the same brush but because of that I went it alone and a few months later made a very good move, doing an FX deal into US$ at 2.01 and sold 6 months later at 1.398, just leaving the cash on deposit at 4% in US bank accounts (ones that that didn't go to the wall!) A much better result don't you think as I also avoided getting hit by the stock market crash.

Gentlemen,with one obvious,and anonymous,exception,this has been a most edifying thread. What is abundantly clear is that,in general people mistrust and dislike,perhaps hate is not too strong a word,the financial services sector as a whole. They feel,as I do,that they have been cheated and lied to consistently and that the clueless ,toothless regulator will not help.My personal feeling and my resolve is that I must take care of my own affairs and investments,i simply can't trust other people to do what is best for me rather than what is best for them. Tony Peterson,if T A hates you then you can't be all bad

Thank you Geoff.

I have to wonder what sort of person is hiding behind TA's anonymity. He has labelled me a fool (on what evidence?) , haughty, "thinks he is always right" (on what evidence?) and repeatedly cast gratuitous, sleazy comments on my relationship with my wife. She must be a "bored housewife". Etc.

What sort of slimeball conducts a discussion like that I wonder? Oh, I forgot. I spotted early on he was in the financial services industry. Running a bit low on customers probably. Hiding behind anonymity to try to trumpet the utter necessity of mankind of giving his tribe some business.

@Geoff /Martin/TA - Perhaps IFA should be paid no fees but a slice of future returns above base rate then (in investment case) and an hourly charge rate for generic advice.

@Martin... risk... heem... I am wondering if you actually believe in Modern Portfolio theory .

@ Dave Duffy - agree with you about your offshore bond advice. putting all eggs in one basket is madness and why they did that is beyond me. so you were right to run!

@Steve22 - IFAs should not be paid a slice of future returns because they are not fund managers. The overall advice and strategy are equally as important and much aligned with their day job than promising returns. Many IFAs will have to outsource investment management soon anyway.

@ Geoff Evans - so you think I hate Tony? How did you come to that fine eureka moment? Considering you humoured all of us by calling me a Jew and thereby proving your (rather low) class, on the same theme about hatred, do any of us really hate Hitler? I mean we all know he was evil, but to hate him? So don't go making assumptions that i "hate" Tony Peterson! A Self made millionnaire you might be old fella, but the grey matter has been fading for a long time I see. Oops, I'm slimy too? Sounds like a school play yard. Good luck in your old age grand dad. I doubt there will be many to look after you once your money has gone. Oh dear! I forgot that you self manage it! I can just about see you doing so well in your 90s...

@ Tony Peterson - hello again clever man. I sense you are feeling a bit angry? In your old age with so much money and annual success you should be happier. Maybe I should have a word with your wife and ask her to take you on a Meditation retreat. It does wonders for the soul Tony. Then again, she might get bored if you are around...

Back at the ranch, looking at all the comments about and doing a search, I can't seem to find anywhere the statement (or lie you accuse yet again) of me saying "there is no taxation in retirement". If you can quote it, can you point out the entire para please Tony. I Think I might be getting a bit slow in my old age here. Are you seriously able to talk sense other than your own agenda? So if I am "running a bit low on customers", I am likely to come here, be anonymous and seek business for my competition huh? Wow you are so intelligent Tony. How you construct your points and logic is just Petersonesque!

You see why I think you and Geoff Evans are related?

Folks, please keep it to debating the arguments and stop insulting each other. Please keep it civil.

Mary, there is no point trying to keep this civil. I think you should terminate the thread forthwith. I'm pulling out of it, anyway.

I have removed the last few insulting responses from both sides. I'm going to say again: please keep it civil. No matter how much you disagree with someone, there's absolutely no point descending into childish name-calling. If you can't be civil, then please follow Tony's example and stop posting.

@ Mary - my sincere apologies for disrupting the Citywire etiquette, however I'm sure you can see how it all started and progressed. Those who can't handle trouble should not dish it out.

@ Tony Peterson - so you think my comment meant that I implied there is "no taxation in retirement"? For your sake, and others with intelligence, let me paste the comments:

This bit started following Dave Duffy's comment "Tax relief would be good but even better if tax-free on the way out too"

Tony: “if you want a richer retirement you use your own surplus income to invest on your own behalf through your working life... And to get the financial parasites who feed on "tax-breaks" to get proper jobs making things themselves”.

TA: "Just in case you haven’t realised by now, if there are no tax breaks going in, there can't be taxation in retirement. Tax breaks encourage savings as Maverick points out and people are not saving because of a lack of trust, understanding and affordability".

What that means Tony is that one (even the Govt.) can't have the cake and eat it. You can't give tax relief and then not tax the income in retirement. Not very hard to understand I hope.

I take it people here have realised that name calling and finger pointing simply points to one's own insecurities. Whilst always dignified, I am never shy of giving better than I get - the meditation retreats never did it for me by the looks. Mind you, Tony, they didn't really work for you either did they?!

Not sure about others, but I am never always right. There is always something I can learn from another. We are reaching a very important time where advisers need to understand the needs of the wider public, their abilities and finally manage their expectations.

For that, I would rather have a mind opened by wonder, than one closed by belief.

In case anyone missed this, BBC Panaroma had an episode on Bank employed IFA : http://www.bbc.co.uk/iplayer/episode/b0120ydb/Panorama_Can_You_Trust_Your_Bank/

@TA - If you object to IFA being paid for performance as they are not fund manager, then why are IFA receiving trail commission from the fund sale?

Also, under Consumer Protection From Unfair Trading Act, Fortune teller needs to tell their client that the activity is for entertainment purposes only. As many specific investment sales are really no matter than fortune telling, what do you think about lableing those as 'entertainment' as well ? (I have no problem with generic, common sense, or regulation related financial advice which are measurable)

@ Steven22 - I saw that Panorama last night and was not surprised at all. Firstly I doubt whether any of them were IFAs - they are tied agents selling Bank and its affiliated products. Why anyone would expect better from a bank is beyond me.

You have to look at the business model. If there are strict targets, with advisers expected to earn commission, they can't be thinking in the client's best interest. Simple. That model needs to be broken.

Trail commission - that is another one that will be gone soon. Post 2012, an adviser will need to justify what he does in order to receive any remuneration. Trail commission was intended to pay for the "maintenance" of the investment.

Since you think that many investments are no better than fortune telling, it will help you to know what the IFA was intended for:

1. to identify the need

2. to highlight any shortfalls

3. to devise a strategy to attain the need and mitigate any risks

4. to create a portfolio or attain the need

5. to maintain the portfolio with the client's ever changing circumstances

now if a £1m portfolio pays £5k a year (renewal commission), that client is (generally) guaranteed to get regular visits. if a £25k portfolio generates £125 a year, the adviser will be running at a loss. that is where cross-subsidy comes whereby the £1m investor subsidised the £25k investor. hardly fair considering both should get the same care and attention to detail.

Financial Planners get paid annual fees to do all the above points. That is the only way which is fair....however, he who promises to beat the other stock picker is bound to be disregarded when things go wrong.

A sad fact is that many are quick to understand the cost of everything but the value of nothing. The above 5 points are all about value - and not by attempting to beat the market consistently.

And more fun here according to FSA 'Dear CEO' letter published today:

http://www.fsa.gov.uk/pubs/ceo/dear_ceo_wealth_management.pdf

14 out of 16 firms were judged to pose a high or medium-high risk of detriment to their customers, based on the number of client files which had a high risk of unsuitability or where the suitability could not be determined.

• Overall, 79% of files reviewed had a high risk of unsuitability or the suitability could not be determined.

• 67% of the files reviewed were not consistent with one or more of the following: the firm’s house models; the client’s documented attitude to risk; and the client’s investment objectives.

Currently the best way for the young to ensure suffient pension for a good retirement is to get a job with the Civil Service, NHS or Local Authority. You may not get rich unless you can get to the top but there will be a good pension waiting for you. I do not believe that the present or any future Gvernment has the will to change this.

While the Government is inflating its way out of the debt crisis the world economy is in trouble and UK Governments see savers as cash cows. Coupled with the general greed and incompetance of the financial sector I do not believe there is any hope for the majority of of pensions investors.