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Thursday, May 19, 2016

The Great Pension Con

Andy Haldane, the chief economist of the Bank of England, has said that consumer confidence in the financial services industry had been damaged because even he cannot make "the remotest sense" of most pension deals.

He is quoted by the Telegraph:
"I consider myself moderately financially literate - yet I confess to not being able to make the remotest sense of pensions.

Conversations with countless experts and independent financial advisers have confirmed for me only one thing - that they have no clue either. 

That is a desperately poor basis for sound financial planning."
He is absolutely correct. However, I would also add that he has ignored the elephant in the room; namely that pensions are a con:

1 The enforced contribution to the state pension is a means the government uses to forcibly borrow from taxpayers.

2 Pension funds are sucked dry by management charges and piss poor investment decisions by said "managers".

For all the good they do, it would be better that the pension funds be paid out in full as cash on retirement to the hapless pensioners (instead of leaving it in a fund to be sucked dry by management fees and inept investment decisions) so that they can at least enjoy the money before they become too old.

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