1926: The Great K&A Train Robbery |
Banks have been taking a hammering of late in the press. Co-Operative look set to swoop in on the fire sale of 630 or so branches of Lloyds TSB (who don’t forget also have Halifax and C&G branches). This will obviously increase the presence of the Co-Op, who will, if successful, control around 10% of UK branches, which will almost triple its current share of the high street. The sale was originally priced at £1.5bn, but it is widely reported that this will be significantly discounted. Remember that Lloyds are still heavily owned (40%) by the UK taxpayer. Personally, I would imagine that Lloyds would welcome being forced to get rid of branches, they are invariably expensive cost centres and with the advancement of online banking, it is hard to justify why (beyond local community reasons) they are maintained. The banking system is undergoing the equivalent revolution that the steam railway faced. You may have seen the Lloyds “for the journey” high speed train adverts, perhaps not an intended link – the internet is certainly the future of banking, which is admittedly about user experience, but not exactly about the journey. To add a little fuel to the fire, the Office of Fair Trading has begun another review of the market, this time with emphasis on current accounts. The last OFT review was in 2008, which was mainly concerned about overdraft charges. I couldn’t resist using the image of this film poster despite it not being a black horse.
The Labour leader, Ed Miliband has been complaining about the charges on pensions. I’m not sure where he has been getting his information, but the sort of charges that he is citing (5%)are for old style pensions and he may have forgotten that whilst charges are an important element of building a pension fund, they are by no means the most vital part. The ABI and many advisers are rather cross. Stakeholder pensions, with charges capped at 1% were introduced by the Labour Government and have been a complete disaster in terms of the number of people using them. Sadly, it is hard to get the majority of people to plan for their futures and however cheap the pension, does not lead to improvement in the numbers doing so.
I don’t have too much of a problem with his basic gripe, though his information does seem very out of date. Anyone that has a more modern pension will have far lower charges than he is suggesting, and frankly it seems a little bit like posturing rather than offering solutions. Successive Governments have made a complete mess of pension legislation, which has become more complex and more restrictive. The Coalition have delayed the review of the State Pension, which could get kicked into the long grass for some time. Sadly, these matters are important and reliance on politicians to sort the system out is about as good an idea as a chocolate teapot. One thing he is right about though is, “A lot of people are going to say, when they retire, I had no idea what was coming my way”. This is why financial planning is important, coupled with financial education (to reveal the future with the chance to change it if you don’t like how it looks). Taking responsibility is the first step towards planning for your retirement, finding a good financial planner to help figure out what you need to support your lifestyle and offering different ways of achieving this is what we do for our clients.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Call us today or visit our website for more information and to arrange a meeting