Tuesday 25 March 2014

Tuesday, March 25, 2014 Posted by Hari No comments Labels: , , , ,
Posted by Hari on Tuesday, March 25, 2014 with No comments | Labels: , , , ,

SOURCE BBC NEWS: Pension reform: Ten hidden consequencesA huge change in the way people fund their retirement is expected following the chancellor's "pension revolution". Under the proposals, from next year millions of people reaching retirement age will be able to spend their pension pot in any way they want. The move, announced in the Budget, will remove the requirement on many people with defined contribution pensions to buy an annuity, a financial product that guarantees an income for the rest of your life. The government says that the overhaul will give retirees more flexibility to do what they want with their pension savings, but Labour says this policy has the potential to be "reckless". We list the potential hidden consequences.
SOURCE TELEGRAPH: Rip-off pension fees 'cost savers £27bn', says OFT
In a mammoth report, the Office of Fair Trading declared the £275 billion pensions industry has short-changed and bewildered savers and employers alike with workplace pensions that carry a complex web of up to 18 different hidden fees. The highest annual fee in the market is 2.3% (consuming 50% of your pension pot) and the lowest 0.05%. Across the industry, some 14% of schemes, holding £40 billion of assets, were judged to be poor value for money. Previous research by the Telegraph found that hidden fees and charges meant workers pension savings can be 50% smaller than those on the Continent, despite saving the same amount.

SOURCE DAILY MAIL: Pensions annuities risk causing the next big financial mis-selling scandal, says Conservative MP
Gloucester MP Richard Graham raised concerns about consumers’ ability to fully understand the annuities products they were offered, adding many were not clear about the fees they would have to pay. He said: ‘Since this is potentially the second biggest financial purchase of our lives, I believe the state of things is worrying.’ Mr Graham referred to a recent seminar on annuities, which he chaired, during which he asked the Association of British Insurers if there was a danger of any of its members being sued for mis-selling. ‘There was a long pause before the answer came: 'Not yet'', the MP said today.



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