Not much is Richard Harvey’s answer, especially when it relates to financial planning
Now you might consider yourself a well-travelled sophisticate, but while you’ve been relaxing and enjoying the peace during your summer hollies in foreign climes, you might just have raised an eyebrow at the, well, odd behaviour of the locals. We all do.
You know what I mean! The Parisian waiter who treats you like a malodorous vagrant, and then scowls when you don’t leave a tip. The Italian lothario who lasciviously ogles your teen daughter, and wonders why you react like a Victorian curate. The Americans at the Sunday brunch spooning dessert goodies onto the same plate as the bacon, eggs and hash browns.
Misunderstandings like that are just part of the travel experience, prompting much merriment when you later recount them to friends and family.
Misunderstandings and financial planning don’t mix
Such things are all harmless fun of course. But when it comes to financial planning, pensions and savings, misunderstandings lurk at the other end of the spectrum, often catastrophically. They really aren’t funny at all.
Recently, the media has been full of stories about people being persuaded to re-invest their pension pots into ostensibly better-rewarded schemes.
Not surprisingly, this of tenends badly, as in the case of a former Rolls-Royce employee who re-invested his £196,000 final salary pension pot on the recommendation of a doorstep ‘adviser’ – and saw it crumble by £16,000 within just six months. The long term consequences of such a move are likely to prove significant – and I suspect – not to our poor pensioner’s benefit. The victim, incidentally, had a childhood brain injury, and has no memory of the transaction.
But misunderstandings can occur in the most benign circumstances, even where the relationship between an adviser and their client is based on long-standing trust.
I have no evidence for suggesting this, but I bet the vast majority of SIPP holders haven’t a clue what most of the language means when their regular valuation arrives in the post.
They wouldn’t know their fund platform from their transfer value, their global targeted returns from their asset allocation. And why should they? It’s why they pay for advice after all!
Anything to clear the fog of confusion around savings is to be welcomed, so it’s disappointing to hear the government may be considering to strangle at birth a sensible suggestion to provide an online pension tracker/dashboard for workers planning for retirement, partly so they are better informed when scammers call.
It is also intended to help workers identify old and often forgotten pension pots from former employers. According to the Association of British Insurers an estimated £3 billion is sitting in unclaimed accounts.
If the tracker had been available when I was thinking about drawing pension, it would have revealed I had a claimable sum for the 18 months I worked for the British Tourist Authority.
I have no evidence for suggesting this, but I bet the vast majority of SIPP holders haven’t a clue what most of the language means when their regular valuation arrives in the post
As it turned out, the entire pot came to £96 – just enough to buy a half-decent dinner for two.
The IFA Sherlock Holmes Award this year goes to John Ralfe for his tireless work rootling around the Teachers’ Pension Scheme files.
Mr Ralfe says the already generous defined benefit scheme has been made even more lustrous thanks to increasing wodges of taxpayers’ contributions. He says a teacher’s pension has increased from 15 percent of salary in 2012 to 40 percent in 2018, and that other public sector pensions may also be enjoying a similar bonanza.
The reasons for this are a little convoluted, but he’s clearly done his homework, even if the Treasury is quoted as saying: “We don’t recognise those figures”.
As someone who has spent most of his career in publicity – some of it endeavouring to keep clients out of the media – I can confirm this is Treasury PR-speak for: “He may be right, but we’re sure as hell not going to confirm it. And hopefully the story will just go away.”