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Cafe society has taken savings off the menu

According to the recent report by the Pension Commission, the need to incentivise people to save and the cost of advice appear to be incompatible.

The report also recognises that most people need to be motivated to save.

After a working lifetime, if one person has a given sum for their retirement and the other has none, who is better off? The answer you might say is self-evident – the one who has the money. Quite so.

In the early 1970s, like many others, I was persuaded to invest in a whole-of-life plan. Inevitably, a few years later, I needed every penny that I could find for the deposit on a house. The life policy was cashed in for somewhat less than the contributions.

Was I annoyed? No. The point is that it was there to be cashed in. If I had not been persuaded to save in the first place, I probably would not have had the money.

Instead of being invested in high-charging investment contracts, today&#39s potential savers are spending on such essentials as branded coffee, expensive haircuts and acrylic nails. God help us.

The effective charge on such ephemeral consumer purchases must be around 100 per cent. Perhaps an ombudsman should investigate.

The saying “You get what you pay for” could be paraphrased as “If you do not pay, you will not get” -and that is exactly what will happen to advice.

Forget 1 per cent. That is a red herring resulting from misguided reports such as Myners based on huge occupational schemes here and US 401(k) profit-sharing plans with many thousands of members.

US employers&#39 schemes with single and low doubledigit membership pay substantially more. But they have members.

David Strange

Managing director,


Sevenoaks, Kent


Baillie gifts Sipp scheme

BAILLIE GIFFORD SELECT PENSION Type: Self-invested personal pension Minimum investment: Lump sum £50, monthly £50 Investment choice: Scottish Mortgage Investment Trust, Monks Investment Trust, Scottish American Investment Company, Edinburgh Worldwide Investment Trust, Baillie Gifford Japan Trust, Baillie Gifford Shin Nippon, Pacific Horizon Investment Trust, Mid Wynd Investment Trusts, Baillie Gifford Bond Pension Fund, Baillie Gifford […]

Dresdner launches hedge fund covered warrant

Dresdner Kleinwort Wasserstein has launched the UK&#39s first covered warrant linked to a hedge fund index.The investment bank is this week launching a three year tracker certificate linked to the returns of the HFRX Global Index. Dresdner launched into the covered warrants market back in February and offers covered warrants based on UK blue chips, […]

Legal threat to FSA over Network 300

Group 300 chief executive Chris Batten says the firm could bring a case against the FSA over its treatment of collapsed IFA network Network 300. Network 300 was placed into administration when the FSA removed its authorisation, blaming insufficient resources. Batten says the FSA would not allow £1.2m spent on developing new technology to be […]

Wilson pledges market balance

FSA director of high-street firms Sarah Wilson says the regulator will do all it can to maintain an innovative marketplace for mortgages after M-Day. Wilson told Money Marketing that the new regime – which takes effect from November 1 – would endeavour to balance the need for consumer protection with the maintenance of a wide […]


Guide: day-to-day tasks ​— can your system manage?

This guide from Johnson Fleming will take you through the required communication and also give ideas for additional actions that will ensure your auto-enrolment project is a success. As well as highlighting what is required from a system to ensure it is up to the tasks, an overview of the following is also provided: data validation; data categorisation; employee communication; opt-in process; opt-out process; produce contribution schedule; contribution reconciliation process; upload of member data to pension provider; upload contribution to pension provider; manage salary sacrifice process; enrolment process; re-enrolment process; and management of increased employee queries.


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