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Panorama: Pension Funds Pay 80% To Banksters And Commission Agents

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Fat cats 'take £80 for every £100 you pay into a pension'By Sam Greenhill
Last updated at 7:57 AM on 4th October 2010
Comments (1) Add to My Stories Up to £80 is snatched in ‘fees’ for every £100 that workers pay into their pensions, research has found.
Hidden charges are robbing employees saving for their retirement – while fund managers and marketing men are turning themselves into millionaires.
The scale of the scandal has been highlighted in research for Panorama, to be screened on BBC1 tonight at 8.30pm.
Read more:
http://www.dailymail.co.uk/news/article-1317498/Fat-cats-80-100-pay-pension.html#ixzz11NC08nWP' rel="external nofollow">

Apparently the worst in the world. Light touch and all that...........................

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actively managed fund, TER of 1.7%, compounds up to 90%+ charges over 40 yr period

index fund, TER 0.37%, compounds up to 15% charges over 40 yr period

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Becuase they are worth it...... :lol:

I dont have a pension and and have no plans to get one either.

Edit. I also thought most people knew about these high charges they levy.

When I started seeing the true charges (and hidden ones for every change you made) being taken out in first two years of mine, I totted up their take (and the lost capital to invest with) for an estimate over XX years and immediately stopped paying into it!

"but would also have accrued charges amounting to 66699,900"

Edited by erranta

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Is it any wonder people turned to property for their future security ?

And the banks own most of that too. When they begin mass resposessions they will make out like banksters!

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Low/no fee SIPPs stuffed with RTFs are the way ahead, only pay on trades then. Ever since I worked as temp admin assistant in HSBC pensions department in a Uni vacation many years ago I've realised the total con that pensions and annuities are. Thankfully I have a final salary scheme with my employer, but also pay into a SIPP.

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Fat cats 'take £80 for every £100 you pay into a pension'By Sam Greenhill
Last updated at 7:57 AM on 4th October 2010
Comments (1) Add to My Stories Up to £80 is snatched in ‘fees’ for every £100 that workers pay into their pensions, research has found.
Hidden charges are robbing employees saving for their retirement – while fund managers and marketing men are turning themselves into millionaires.
The scale of the scandal has been highlighted in research for Panorama, to be screened on BBC1 tonight at 8.30pm.
Read more:

Apparently the worst in the world. Light touch and all that...........................

Excellent news, that panorama will publicise this scandal.

I hope they investigate also the role these pension funds had in the banking crisis. I think the pension funds were the main shareholders of the UK banks that were reckless, and it seems that there is a causal link there, behind the failure of banks' "corporate governance"...

<sigh> It is a long story... real owners (all of us) too many, disorganised, and too far from the decision process, etc...

I had some good chats in this forum about that before, one with LuckyOne. He knows more about it. I'll try to find it and post it here.

OK, I only found one of them:

The real problem in the case of Barclays is the shareholders. In a rational world, they should vote to prevent Bob from being paid this much as he simply isn't worth it.

The reality is that most shareholders have appointed others to manage their holdings on their behalf. The agents include unit trusts, mutual funds, pension funds etc etc.

These agents are not exercising their fiduciary responsibility on behalf of the ultimate owners of the shares, often because of a blatant conflict of interest. Some Barclays shares are held in ETFs sponsored by Barclays for example. Some mutual funds / unit trusts are managed by other banks with an interest in seeing higher rather than lower compensation for the entire sector.

This interefence with the operation of a free market is even worse than the attempted manipulations by the left. The left are at least honest about what they are trying to achieve. The pseudo-capitalists are hypocrites of a fairly high order. They want free and fair markets when it benefits them and and closed and suboptimal markets when it suits them.

Before bringing out the flamethrowers, I think of myself as being on the right and a free marketeer. I do not think that the interests of free markets are well served by hypocracy and the adandonment of fiduciary responsibility, especially when it comes to executive compensation.

I agree completely. The main problem in the financial organisations was a failure of Corporate Governance.

In a way it is a by-product of the democratisation of capitalism. Nowadays these corporations are owned by millions of individuals, but most are too far from the decision process, and own to little each to be able to exert any control. The intermediaries (pension funds, and others), as they are usually rewarded for short term successes, failed to care for the long term of these corporations.

( Ironically, if banks were still owned by the mythical small group of old little man, scheming in darkened rooms - as the left imagines it - we would not have had this crisis. )

The real "bankers", the shareholders, lost virtually everything. The bank directors (high level employees), were princely, kingly rewarded for many years, and still are!

Yes, the whole system needs revision. And in America it may happen. (Are you in America?) I remember studying their regulatory drive about a century ago, after Rockefeller, monopolies, etc. They do want capitalism to have legitimacy there. In Britain though, the old boy network and fudge may survive for quite some time. :(

I truly believe that this is one of the major problems with large businesses globally. The owners (shareholders) have allowed the employees (especially senior management) to act in too much in the self interest of the employees and not enough in the self interest of the owners.

PS. I live in the UK for about 9 months of the year and in the US for about 3 months of the year.

Edit to add a consequence of it all: Chart Lloyds 10 years share prices: http://uk.finance.yahoo.com/q/bc?s=LLOY.L&t=my&l=off&z=m&q=l&c=

.

Edited by Tired of Waiting

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You can run a company or you can ruin it, all it needs is the addition of and "i" to do it. There are lots of "i's" at the top of uk companies.

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Funny that banking is the only industry where the people who provide the capital (you and me through savings and investments) are deemed to be less important than the workers (the bankers).

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Financial "products".

"Independent" Financial Advisors. None of them are to be trusted. There is no such thing as an "independent" financial advisor. Nobody is out there to make YOU money. They only do what they do to make themselves money. A friend handed over his pension scheme to an "IFA" for perusal and subsequent "improvement". I virtually begged him not to do it without ascertaining the management fees and the IFA's future takings. But he was convinced that the "hundreds" that the IFA cost would be more than made up for by the significant improvement in the performance of his pension fund. Guess what. The fund underperformed even more than the original, and the "advisor" fees present and future amounted to many (many!) thousands of pounds. A case for mis-selling if ever there was one, but i fear he does not want to do battle even though traumatised by it all coming up to 60.

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I have a serious question. What if you're company matches your contributions to a certain level, say 8% of salary for example. Is it not worth it in that case, you are effectively getting free money?

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I have a serious question. What if you're company matches your contributions to a certain level, say 8% of salary for example. Is it not worth it in that case, you are effectively getting free money?

Mostly yes. You may have to use the scheme your company specifies but you can always move the money out of it into a SIPP to get the lower charges.

In my last two employers schemes, I negotiated lower charges based on fund/contribution size, currently being charged 0.5-0.75%.

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My company scheme matches up to approx 5% and use a well known bank (SW) which does the share dealing etc. I'd probably it was rather a SIPP but I don't think that's worth it until you have more than approx £20k+ in there, due to fees. The charges currently stand at 1% per annum - quite high IMO seeing as if I had a SIPP I'd be doing some long-term investing and buying of low-fee index trackers. Is it usualy possible to transfer to a SIPP? Furthermore, as indicated in the article, who knows what's being invested in (property!?) or how often they trade (losing you a lot of money in trading fees). Hmmmmmmmmm.........

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Fat cats 'take £80 for every £100 you pay into a pension'By Sam Greenhill
Last updated at 7:57 AM on 4th October 2010
Comments (1) Add to My Stories Up to £80 is snatched in 'fees' for every £100 that workers pay into their pensions, research has found.
Hidden charges are robbing employees saving for their retirement – while fund managers and marketing men are turning themselves into millionaires.
The scale of the scandal has been highlighted in research for Panorama, to be screened on BBC1 tonight at 8.30pm.
Read more:
http://www.dailymail.co.uk/news/article-1317498/Fat-cats-80-100-pay-pension.html#ixzz11NC08nWP' rel="external nofollow">

Apparently the worst in the world. Light touch and all that...........................

It's about time this came out in the open. It's got to stop.

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the mortgage?

Sorry to disappoint, but I have been paying off the mortgages from rental & my own income.

I will look to buy a few more in 2011 as well - but the next few purchases will be cash (better to get 7% to 8% return, than leave it in the bank).

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I have a serious question. What if you're company matches your contributions to a certain level, say 8% of salary for example. Is it not worth it in that case, you are effectively getting free money?

Yes.. In my case, I pay 3% pre-tax, company adds 6%, so for 2% of my take home pay I get to pay in 9% gross. Or something..

The issue is, of course, that all of these incentives mean an assured income stream for the City. And, of course, I don't see much at all of what happens to my pension find on a day to day, or even year to year basis. You never seem to get a clear statement (as in 'You put in X,. we skimmed Y, and after our investment in our mate's company tanked your fund is now worth a pathetically small Z).

The most efficient thing I could do with the 'pot' would be pay down the mortgage. For some reason that doesn't seem allowed.

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No surprise at all - that 's what I did.

Plus you have something to leave to your family.

That's completely perverse - it's a gamble based on when you sell, your health, Govt taxation laws at time of selling ie Inheritance thresholds etc

Meanwhile by buying you reduced your kids future choices - they then have to compete with others for fewer properties on the market - subsequently borrowing more off the banksters (paying exponential amounts of interest the longer the term)

With each generational hike, the bankers cream off higher and higher charges fees & interest! :rolleyes:

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What I'd like to do is to be able to have a fee free SIPP and be able to invest in whatever I like free of any interference.

For example:

If I put £1000 I'd like to be given £1200 to invest in something like Zopa AAA rated borrowers earning me 5% per annum after defaults.

Why I'd even need someone to manage it for me or skim off the top I don't know.

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Isn't this something that the FSA should be monitoring?

Oh well, just a thought. :unsure:

The FSA were told to back off under Brown's "light touch" regime for the City. Brown basically needed the pension funds to rob to pay for his economic miracle.

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What I'd like to do is to be able to have a fee free SIPP and be able to invest in whatever I like free of any interference.

For example:

If I put £1000 I'd like to be given £1200 to invest in something like Zopa AAA rated borrowers earning me 5% per annum after defaults.

Why I'd even need someone to manage it for me or skim off the top I don't know.

zopa skim 1% per annum plus their upfront fee. By the smae logic as the article, over 40 years that 1% per annum is GBP400, or 40% of your initial GBP1000. IF they charge 2% that is 80% of your initial GBP1000.

Of course, comparing the present value of accrued fees over 40 years with initial investment is like comparing apples and oranges. Same with comparing future value of interest payments with present value of mortgage. Ultimately, it is incorrect and the inability of the general populous to understand the "time value of money" is exactly the reason that bankers can get away with it.......

2% fees on a pension is high, but not as outrageous as the Daily Wail suggests.

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Well those bottles of Krug don't pay for themselves you know.

The only remaining incentive for any kind of pension fund is the supposed tax relief (which they’ll take back off you and them some upon drawing the income out).

Soon this will be done away with as well. The political art of giving with one hand whilst taking with the other, will be replaced by two hands shaking you upside down by the ankles.

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Of course, comparing the present value of accrued fees over 40 years with initial investment is like comparing apples and oranges. Same with comparing future value of interest payments with present value of mortgage. Ultimately, it is incorrect

Run that by me again.

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  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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