Standard Lifes Own Goal

[OLDFTB]

Standard Life has admitted that it gave misleading estimates to the Chancellor of likely SIPP business, which caused him to make a U turn on the idea.

The life company, which is the leading UK SIPP provider, told the Chancellor it expected 3bn pounds to be spent on property in SIPPs.The inflated estimate was apparently designed "to test whether the Government was really serious about the plan".

The real estimate was only 200 million pounds.

http://www.telegraph.co.uk/money/main.jhtm.../17/ixcity.html

What are the chances of that happening!

lifted from motleyfool: http://boards.fool.co.uk/Message.asp?mid=9720878&sort=whole

[Realistbear]

Standard Life has admitted that it gave misleading estimates to the Chancellor of likely SIPP business, which caused him to make a U turn on the idea.

The life company, which is the leading UK SIPP provider, told the Chancellor it expected 3bn pounds to be spent on property in SIPPs.The inflated estimate was apparently designed "to test whether the Government was really serious about the plan".

The real estimate was only 200 million pounds.

http://www.telegraph.co.uk/money/main.jhtm.../17/ixcity.html

What are the chances of that happening!

lifted from motleyfool: http://boards.fool.co.uk/Message.asp?mid=9720878&sort=whole

Not so sure. This article suggests that everyone knew how much money was ready to be invested into SIPPs and it was billions:

http://portal.telegraph.co.uk/property/mai...7/ixptop12.html

Gordon is not as stupid as we on HPC seem to think--far from Gormless Gordy he is shrewd in that he has pulled off a government goal of providing tons of new housing at no cost to the government. By luring builders into thinking that there would be a SIPPS induced Spring bounce thousands of cheap homes were built (flats) in anticipation. The rug gets pulled on SIPPS and thousands of empty flats flood the martket reducing prices accross the board. Now the government will not be forced to build council homes for those priced out the market as the SIPPS fiasco will achieve the HPC at no cost to the Treasury. Well done Gordon???

http://www.devilducky.com/media/26599

Edited December 17, 2005 by Realistbear

[foxytrader]

Not so sure. This article suggests that everyone knew how much money was ready to be invested into SIPPs and it was billions:

http://portal.telegraph.co.uk/property/mai...7/ixptop12.html

Gordon is not as stupid as we on HPC seem to think--far from Gormless Gordy he is shrewd in that he has pulled off a government goal of providing tons of new housing at no cost to the government. By luring builders into thinking that there would be a SIPPS induced Spring bounce thousands of cheap homes were built (flats) in anticipation. The rug gets pulled on SIPPS and thousands of empty flats flood the martket reducing prices accross the board. Now the government will not be forced to build council homes for those priced out the market as the SIPPS fiasco will achieve the HPC at no cost to the Treasury. Well done Gordon???

http://www.devilducky.com/media/26599

Not sure if that Telegraph link was the one you meant. That very succinctly portrays the mess of new-builds without buyers. The amount going in to Sipps will never be known. However even as a sceptic of the scheme (due more to its administrative complexity and fiscal boobytraps than bearishness) I definitely reckoned more than £200m. After all when sales people with a deadline meet people motivated by greed and Manek syndrome the numbers can be impressive.

More interestingly is why Standard Life feel they should break cover on this - they look "dodgy" for overstating it to the Treasury and incompetent if they only reckoned the market was worth £200m when they had taken £1bn in for their Sipp which was only marketed after the Green Paper and so was effectively set up for property investment. After all you wouldn't put your money with Standard Life for their own fund performance!

If they did spend "millions" setting up their Sipp operation and systems and yet only predicted the market at a few hundred million (on which they might get 1% pa at most) as a member I would be wondering about the competence of the mutual's board of management.

Also did the Treasury really base their entire decision on what an underperforming mutual life company with a massive vested-interest said would happen and why on earth would Standard Life know anything anyway? They sell the product through intermediaries and the forms don't ask you to specify your investment up front anyway.

Either way neither august institution emerges looking anything but shabby.

The Fox.

[brainclamp]

10 BILLION and upwards!.

How could a major tax giveaway like SIPPS, ever have resulted in just 200m of investment?

Thats what - about 2000 flats amongst millions of higher rate earners!!

More likely, the scheme would have seen a massive takeoff and immense tax giveaways, which would have been funded by the homeless young. If as I thought, just 100,000 investors swtiched to investing £100,000 flat etc.. inside the SIPPS wrapper, the resultant investment would be not 200m but 10 BILLION, with the hapless homeless young worker paying the tax for them!

It was the biggest giveaway in history.

Edited December 17, 2005 by brainclamp

[brainclamp]

IS IT EVER GOING TO END? IS IT WORTH WORKING? WHERE IS THE INCENTIVE?

The immense housing monster is built on the value of falling labour and rising productivity.

Labour costs have been falling -

(a) The largest mass immigration in UK history:/fast track visas/(employers can prevent wages rising by citing skills shortgages) etc... and cutting wage pressures in the private sector where labour is plentyful,

( Falling union membership, 'flexible workforces' a huge increase in a hughly mobile self employed/contract labour market.

Even a manual labourer in the 1970s could afford a home and raise a family.

This huge rise in the productivity of the workforce and technological changes, and falling labour prices, have not seen any real benefits to those workers undertaking these changes.

(It seems the very worse thing to do was to work hard and save over the past decade, and the best was just to buy a house, sign on and relax!)

The rising unemployment rate has cause speculation of even bigger rate drops by the BOE (and higher houseprices). I would not be surprised to find that it is the total destruction of savings and impossiblity of owning a home which is causing people to simply stop working hard.

The homeless under 40s have to ask themselves is it worth working? Just where is the incentive in the face of even small rises in HPI from these levels, under a rising tax burden.

Those lucky enough to own thier own homes, but without a pension and rising taxes will also have to ask it is worth really working hard? Where is the incentive?

[Guest Bart of Darkness]

Gordon is not as stupid as we on HPC seem to think--far from Gormless Gordy he is shrewd in that he has pulled off a government goal of providing tons of new housing at no cost to the government.

Not financially but it's cost them an awful lot in terms of credibility and good will.

[bpw]

Given the current climate for new employees I would recommend that everyone under 30 find a job in the public sector. The trick would be to find a job with reasonable pay, a 37.5 hour base week, defined benefits pension, a housing subsidy if you can get it (e.g. nurses), little stress, a union and no incentive other than to spend the week deciding on the next course to go on (you know who you are!!). This could lead to a perfect life. Just imagine you could go out on the piss three times during the week and, when your boss challenges you to be more responsible, you just go to the union and threaten action against the government........ brilliant.

Not financially but it's cost them an awful lot in terms of credibility and good will.