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Corbyn takes aim at ‘rip-off’ private pensions

Jeremy Corbyn

Jeremy Corbyn says a Labour government would embark on “fundamental reform” to address the needs of “the real middle Britain”, including tackling “rip-off private pensions”.

Writing in the Observer, Corbyn said the party will focus on middle and lower-income voters to develop an alternative to the Tories’ “insecure and credit-fuelled economy”.

He says Labour will tackle “rip-off pensions, unaffordable housing, mounting tuition fee debt and crisis-ridden social care”.

He adds a national investment bank and the “reindustrialisation of Britain for the digital age” will replace “Osborne’s economic house built on sand”.

Corbyn’s comments echo former leader Ed Miliband, who warned “rip-off merchants” would feed on the pension freedoms.

Former shadow pensions minister and Labour MP Gregg McClymont fought a long battle to introduce a cap on auto-enrolment charges and improve fee transparency to stop savers being “ripped off” by providers.

But at last year’s Labour conference Standard Life head of pensions strategy Jamie Jenkins said scammers were preying on politicians’ rhetoric to entice savers into high risk investments.

He said: “People are reading politicians saying pensions are a rip-off, but on the other hand auto-enrolment is great, and that’s a confusing message.

“It’s easy to exploit, and people play on that rhetoric and we are almost giving them a license to do that.”

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Comments

There are 34 comments at the moment, we would love to hear your opinion too.

  1. In 2016, what does a rip-off pension look like?

    Whilst still at school we were warned off using inflammatory adjectives in place of facts. Please can we have a journo querying such items? Do any of the journos here know the answer? Stakeholders are now seen as expensive, though not when looking at the actual £.s.d. cost of things – has anyone noted in now costs more than ten shillings to send a pension statement first class?

    So with stakeholders setting the bar, where is the labour party finding these rip off pensions? Surely they are not referring to 1990’s contracts – like Neil Kinnock, Degsy Hatton, Mini Metros and Vanilla Ice, we’ve moved on. The majority of schemes we now see are below 70bps, and its great to see insured schemes below 30bps, so again, what is he talking about?

  2. I hope Labour keep him as leader for many years. As long as he keeps spouting cr*p like this along with all the other cr*p he comes off with, they have no chance of getting back into power.
    I would however like to know to what he is referring. The number of Old style pensions of the description he gives are minuscule compared to the more modern ones. However depending on your definition of rip off, depends on your point of view.
    For example I was referred to a potential client who was irate about his pension because he wa looking at using freedoms now but just wanted to go over some things first. He has a transfer penalty of £6,213 on a fund of £78,652, which on initial thought was horrendous. Looking at it closer it also has a GAR of 9.75% at 65 (2 years from now). After explaining how drawdown actually works and the possible downside is reduction in income and showing him a comparison of what a typical annuity these days would provide him the smile on his face was superb to see. Happy camper is a good adjective to use. Would this political moron (and others) call this a rip off?

    • The best bit, is that many a client will have already tried to cash in some of the old really good policies and probably got very narky about why they were required to talk to an adviser because they had a GAR or the such like.

      They will be going on about how their provider is rubbish, how they just want the money, without being ripped off, but were they allowed to cash out that policy, then find out at a later point they had lost massively, they would be the first to complain. Much like Jeremy Corbyn.

      As for what Jeremy Corbyn knows about pensions, I imagine we could fit it on the back of a postage stamp in size 12 font.

  3. Once again an ill informed politician comes out with comments that are not backed up with facts but make good sound bites!

  4. Sound bite scaremongering. Do politicians not realise that the ill informed rhetoric they spout often gets further exaggerated by ill informed national journalists making the electorate ill informed leading to bad outcomes. All the while its the “industry” and “providers” that end up as the bad guys?

  5. ^^^ spot on Alf.

    I echo Alf’s point – the question to a politician should be…. precisely what is the ‘rip off’ being made and who is doing the ripping off???

    Yet again, when there are elephants in the like those who are being sold unadvised UCIS investments via SSASs (for example) and the client being oblivious to the risks. But hey, let’s focus on fractions of a % to get media headlines rather then the genuine risk of loosing everything.

  6. paolo standerwick 13th January 2016 at 12:43 pm

    The REAL ‘Rip Off Pensions’ are the public sector schemes which cost the tax payer a fortune. The cost of public sector schemes even dwarf the banking bail out. Put that in your Labour pipe and smoke it!

  7. I am perhaps a typical middle Britain and I am very glad indeed that my wife and I contributed to private pensions as indeed are my old clients – as they have told me so. Indeed a few who reached their retirement have told me they regretted not putting in more. (As I had advised).

    I can only hope that the CIA have you in their sights, as the UK seems unwilling or unable to do anything about you. Your dystopian view makes Russia look attractive. I really don’t want to live in a clone of North Korea with you at its head.

  8. Maybe he is confusing Private Pensions with the various revisions of Final Salary offering from the NHS with the ever increasing costs and reduced benefits that have been applied?

  9. He wants to develop an alternative to Tories “insecure and credit-fuelled economy”??

    Am I mistaken or was it not during the last Labour government period when a lot of the damage was done in terms of a massive credit bubble being created partly by the housing price boom? ‘Things could only get better’ and ‘the feel good factor’ were the ultimate example of an economy built on sand Jeremy so best get your facts correct eh.

    I thought you were going to present a new honest brand of politics full of integrity and straight talking??? Did not take long for you to fall into the sneaky headline grabbing/lacking substance political games did it?

  10. Rhetoric such as this probably persuaded people to eschew pensions in favour of buy-to-let investments. They are now “rip-off private landlords”. Most of us and our clients do what is best for ourselves and our families and prefer this to listening to “sod-off politicians”. Basically Corbyn is saying that he’d nationalise us all.

  11. Yet more Alice in Wonderland politico thinking!

  12. And his gold plated MP’s pension which we all fund through our taxes, now that is a rip off to the entire tax paying public

  13. John Hutton-Attenborough 13th January 2016 at 1:18 pm

    Can I have an MP’s pension promise please?

  14. I think we are being over technical here, whatever the reality some things are perceived by the public to be a ‘rip-off’, you could also include estate agents fees in there, but what Corbyn has listed are four things that chime with the public at large; pensions, housing, tuition fees & social care, I’ve left the emotive adjectives out but he would perceive these as Labour strengths. Actually if you think about it our industry plays a part in all four of these.

  15. He’s going to have to put in one heck of a shift to do all of that in 5 years! Unless we are all on our way to hell in a handcart before then!

    People will vote for Labour, but I don’t see him being leader for long! Cloud cuckoo-land politics and sound bytes!

  16. Hey let’s excited about nothing eh chaps?

    I would tackle rip off private pensions too if I was in power.

    What he didn’t say is what many here seem to be reading, i.e. Private pensions are a rip-off.

    Give the man a break.

    Ian Coley
    Partner

    • He got a break, Ian, by becoming leader of the political opposition in one of the greatest nations on Earth. Given that almost nobody in the country agrees with anything he says, I’d say that’s about as big a break as anyone could possibly get. The fact that he has turned it all into a complete farce is nobodies fault but his own.

  17. Every time Steptoe opens his mouth another little piece of the modern Labour Party dies.

    I doubt if he has ever seen a Private Pension in his life – why would he ever of had to?

    It is poorly judged non-researched rhetoric that does far more harm than good. You can understand his motives though. A State dependent “victim” is seen in his sorry eyes as a vote for life.

  18. @Harry
    I think you are about as far removed from Mr Corbyn’s middle and lower income (he didn’t mention Britain) as you can get. I suspect you you are in the top 10%, probably top 5% or better.

    As a democracy (or as good as it gets) the UK will have a choice about whether he stays or goes. As for the references to Russia and North Korea, that’s no better than the comments that sparked this off!

    By the way, I don’t want to see him in power either and I hope you are enjoying your retirement.

    • You’ll have me in the House of Lords next – in a baronial estate. I guess it’s all relative. I certainly don’t consider myself in the top 5% – I never mentioned lower. I worked bl–dy hard for 48 years, both in industry (starting on the factory floor) and in Financial Services. A jolly sight more than that plonker Corbyn ever did – and I managed to get myself a darn sight better academically qualified than him too. I was (and probably still am) more of a worker than him and those whom he choses to surround himself. In my view that makes me very much a middle voter – only I generally don’t vote. However if it means that I can vote against him – I certainly will – even if it means voting for Donald Duck.

      Retirement – it’s not all its cracked up to be. Some people actually enjoyed working. Sad, but true!

  19. @Ian Coley The headline reduces the integrity of real Independent Finavcial Advisers who are doing their level best to raise the general opinion of IFA’s and Pensions. This certainly does not help. What about the ‘rip-off MP’s expenses’, ‘rip-off council taxes’ ‘rip-off Govt suppliers’ ‘ rip-off Defence Dept losing Millions of £’s of stock’ ????

  20. Perhaps when Steptoe has finished solving these problems, he’ll be able to sort out poverty in the 3rd world and give his terrorist pals their own continent

  21. This is all about the words you use to make your point. Some have more fundamental effect than others. “Rip off” pensions are much less likely now (but historically pre-stakeholder many pensions had very high fees and some still do). If Rip off was replaced by Pensions with Higher Charging Contracts this less effective in focussing the point. In fact as most people know higher charging under certain circumstances may actually provide better value over time.

    Corbyn is kicking the financial industry because it is easy to do and not especially liked by the world at large (and it’s actions over the years have not endeared them to the populace).

    A good example of how words are twisted:

    Would people rather employ i. A target focused individual with great interpersonal skills or ii. A commission hungry salesman with a great patter.

    They are the same person described in a positive or negative light.

  22. The usual sound bite nonsense.

    So many politicians have used this tired mantra and I have yet to see one back it up with evidence of what a rip off pension look like.

  23. How can a man have lived so may years and yet have so little grasp on reality and truth?

    I’m not entirely convinced that he isn’t actually a highly skilled comic, working undercover in politics, to expose crashing stupidity and incompetence. Maybe the mask will come off soon and we’ll all laugh about it. On the other hand…..

  24. I’m sure to the target voting public that sound bite sounds appealing. It’s just politics after all! Like a few other posters here though, the biggest ‘rip off’ (in my opinion) is the cost of public taxation continuing to support public sector DB schemes, and the gulf between those with and those without……

  25. My £3.00 was worth every penny. The gift that keeps on giving!!!

  26. Curiouser and curiouser…have we noticed that since Mr Corbyn was elected that wilfred Brambell has not been seen in public?

    Coincidence?

  27. More good news for the financial services industry ……..

    Lets face it all people see is “rip off” and “pensions” be it personal or otherwise !!

    The man is a moron ! it matters not what “ISM” social, capital, marks etc etc etc, you follow, if all you want to do is shock or court publicity !
    Just grow a pair Corbyn ! or grow up, one or the two

  28. Typical Politian, shots very loudly, over promises to gain votes.

    So come on then, what are we going to manufacture competitively when China, India pay much cheaper wages, no pensions, no health, do not have to jump through millions of political directives and rules. Does he really believe we can rebuild a large manufacturing economy cheaper then these countries produce the items, with all the requirements put on employers, minimum wage, pension, NI, to employ any one and still be competitive against these countries. Looks like we are returning to nationalized businesses then. 18000 employed in Llanwern steel works in 1982, 3000 now and produce twice the amount of steel.

    Are you really saying you want the UK to return to the 1950’s -60’s.

    As stated above please keep him Labour.

  29. I don’t know why we’re getting ourselves in a lather about this ~ it’s just another of Labour’s battered old gongs that they drag out of their closet from time to time and bang a few times to try to convince the electorate that they’re the party that champions the rights and interests of the common man. Next month it’ll be the familiar old claim that the Conservatives aren’t spending enough on the NHS, the month after that it’ll be that the Conservatives’ tax policies are hurtful to the lower paid, the month after that it’ll be that somebody else isn’t doing this or that. Just the same old same old. It’s what opposition politicians do.

  30. I suspect Corbyn is experiencing a similar problem to many ‘idealists’. He had a view of the world, it’s perceived wrongs and what he would do about it all should he ever get into power. Now, rather unexpectedly, he is in a position where his idealistic views are confronted by the harsh realities of the world. When he can’t make the two align he is left shouting attention grabbing sound bites to continue looking like he knows what he is doing.

    As others have mentioned……………….what is a rip-off pension? Or more importantly, can Mr Corbyn tell us what isn’t a rip-off pension? Is it a public sector scheme with it’s gold-plated benefits?

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