The nice people from LV= tell us that in order to be happy and enjoy our golden years for a 17-year retirement period, a pension pot of over £225,000 is needed to provide about £11,000 a year.
Any one reading this commentary will know that one of the most important financial planning issues is ensuring that an annuity purchase is the most suitable and pays the highest amount for the retiree.
The Financial Services Consumer Panel said last week that insurers are making profits 20 times greater on annuities than on other products. Well that’s not very goodwill to all men, is it?
This story broke within a few days of a TV exposé of one of my favourite shops.
As we finish our Christmas shopping thousands of us will pick up stocking fillers at TK Maxx. But lo and behold, the US department store has been accused of misleading shoppers by making consumers believe they are making bigger savings than they actually are.
The innate responsibilities of the retail world are important to financial planning. No one can financially plan for the future properly until debt with interest is cleared. The reason for debt is overspending. Full stop.
During my many years as an IFA I would help coach younger clients not to buy dozens of designer handbags or shoes every year. The saved shopping money that was deflected from the high street to an investment product gave dozens of people a foundation to build a portfolio or kick-start pension savings.
Being based in the City of London as an IFA meant clients tended to be well paid and their Christmases full of sparkle and magic with little financial worry. However, this is not the situation for everyone at this time of year.
Circle Housing says about 7 million people need to borrow money this month to cover the basic costs of Christmas, including heating and food. Does the regulator not concern itself with the short-term lenders offering APRs over 1,000 per cent for these people? I wish they would.
As the advice gap gets bigger, due mainly to the cost of adviser charging, those needing annuity or debt help require access to personal advice.
In trying to close this advice gap for annuity purchase, the Financial Services Consumer Panel is recommending that a government-led National Default Annuity Service is set up. No thank you, Santa.
Look at the waste of money the Money Advice Service has turned out to be.
Nicola Mitchell, one of the brightest stars in PR, made me laugh in a recent client meeting when she pointed out that with the MAS’s £13.5m marketing budget it is safe to assume there are some expert marketers there safely guiding this huge budget. But weeks after the school term had started it was still advertising around a theme about buying school uniforms. I wish I had the MAS budget to help the unadvised public.
Another New Year wish of mine is that the unintended consequences of the RDR are reviewed, particularly an increasing advice gap and the major banks deciding to stop offering regulated financial advice.
If the RDR is not reconsidered the gap in happiness in retirement for those who are advised and those that are not grows from a gap to a vast chasm.
Happy holidays everybody.
Kim North (email@example.com) is managing director of Technology and Technical