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Standard Life: Pensions ‘rip-off’ rhetoric boosts scammers

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A political focus on pensions rip-offs is leaving savers more vulnerable to scams, according to Standard Life’s head of pensions strategy Jamie Jenkins.

Speaking to Money Marketing at the Labour party conference in Brighton today, Jenkins said attacks on the value for money offered by the industry are “unhelpful”.

He said: “It’s for us to improve the reputation of financial services, and we shouldn’t assume any right to that, but the use of ‘rip-off pensions’ in every sentence is unhelpful.

“If you have a £100,000 pension and you look at an annuity then it doesn’t matter what the rates are like, that’s always going to look small. So in that climate, it’s not surprising for people to be tempted when somebody approaches them and offers an investment in something like car-parking spaces with a guaranteed return of 8 per cent.

“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.”

Elsewhere, former shadow business secretary Chuka Umunna told Money Marketing Labour needs to be an advocate for the financial services sector.

Umunna argues he sought to be positive about the role of financial services during the last Parliament.

However, asked whether the party is likely to maintain, or even expand, such positivity under the leadership of Jeremy Corbyn and shadow chancellor John McDonnell, Umunna said: “I think the last few months in politics have shown that anything is possible.

“I made a speech on the future of financial services in 2013 in Canary Wharf, and I was very clear that not only do you need the UK financial services sector to do a better job for the real economy, but also that it is one of our major sectors where you’ve got a competitive edge and comparative advantage.

“And it’s important that we are pro-City in that sense, because we need the City to do well.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. An excellent point which should be shouted from the rooftops. I wonder how many people at the Labour conference heard it.

    “However, asked whether the party is likely to maintain, or even expand, such positivity under the leadership of Jeremy Corbyn and shadow chancellor John McDonnell, Umunna said: “I think the last few months in politics have shown that anything is possible.”

    In scientific terms it is /possible/ – that is, there is a non-zero probability – that wormholes will open up in space-time and replace the entire Labour Party with 100,000 clones of Ringo Starr from parallel dimensions. It is just extremely unlikely. An especially fatuous way of dodging the question.

  2. Unfortunately (from personal experience) Standard Life is itself guilty of ripping off policyholders. So I’m afraid from where I stand Mr Jenkins is in a glass house throwing stones.

  3. Well there is no denying they are right and something I/we have been saying for ages !!

    One point, yes Standard Life maybe guilty (I wont use rip off) pushing the boundaries, like many others……….. but would you prefer, the consumer pushed to investing in a car park space, or any other un-regulated sack of manure, that some feckless advisers (I use that term loosely) want to push onto the world ?

  4. The Pensions Industry has had its chance. Tax incentives motivated people to buy a dog of an Investment from an Industry that the Investor was then trapped in for decades. All tax Incentives should go and these companies should stand and fight on an Investment level playing field. Attitudes would change and complexity would vanish overnight. Pensions have historically been a rip off for so many different reasons. Somebody shouted: :The emperor is wearing no clothes” at last.

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