CPS author Michael Johnson had a letter published in The Times newspaper on rip-off pension penalties, Friday 26 June 2015.
“Sir, Pensions are afflicted by rip-off penalties. The most egregious is an annual charge for “holding assets”, expressed as a percentage of assets which can amount to thousands of pounds per year, each year. What is being provided is merely a safe custody service, albeit shrouded behind proffered unsolicited research (invariably unread) as a desperate attempt to hint at value for money. A small flat fee should suffice. Indeed, some stocks and shares ISA providers, for example, charge nothing to hold client assets. What is so different about pension pots?
The government is, to some extent, complicit in this theft. For decades it has unwittingly granted a licence — in the form of the sanctity of the “pension product” tax wrapper — that has facilitated the industry’s profitable inefficiencies and rent-seeking behaviour. The result is a bloated, inefficient, opaque, overpaid industry that is increasingly uncompetitive on the global stage. The UK’s financial services supremacy, a precious export industry, is rapidly becoming a myth.
Meanwhile, Baroness Altmann, the new pensions minister, described the pensions industry’s post-liberalisation behaviour as “most disappointing”. Her message needs little deciphering: the industry has been warned. Penalty-free pension pot transfers beckon.”
To see the original letter, visit The Times website.
Date Added: Saturday 27th June 2015