Bank of England Boss Says IFAs Clueless About Pensions

Bank of England Boss Says IFAs Clueless About Pensions.

A statement made by the Chief Economist of the Bank of England, Andy Haldane, has gone viral today.

The speech was made at the New City Agenda annual dinner and Mr Haldane suggested that even though he considered himself “moderately financially literate”, he did not understand pensions and that he had also had “conversations with countless experts and independent financial advisers” and that they too “have no clue either”. 

He then called on the regulator and pension companies to stop using jargon and to simplify pensions for the consumer at large to encourage greater pensions savings.

Comment

We are staggered by these alleged remarks.

Firstly, Mr Haldane has never had a conversation with us, so who his independent financial adviser is we do not know.

Secondly, the complexity of pensions has not been created by the industry, it has been created by Government via the Treasury and then ultimately by HMRC who have to administer pension and tax laws passed by successive Governments.

There are, on average, 2 pieces of new legislation, including each year’s Finance Act (the budget) that affect pensions and have done so for the last 50 years.

Pensions were supposed to be ‘simplified’ back in 2006 yet, instead of 7 different types of tax regime, that new law increased it to 8.  Just a quick rant now:

• Graduated Pension Scheme 1961
• Social Security Act 1973
• Social Security Pensions Act 1975 and contracting out
• Finance Act 1982 and Section 32 Buy Outs
• Pre 1987 company pension rules
• 1987-1989 company pension rules
• Post 1989 company pension rules
• 1989 personal pension rules
• Pre and post 1988 GMP (Guaranteed Minimum Pension) Rules
• Pension Equalisation
• Indexation changes
• Stakeholder pensions laws
• Income and Corporation Taxes Act
• Pensions Act
• Workplace Pension rules
• Lifetime Allowance
• Annual Allowance
• Tapered Annual Allowance
• Unauthorised Payment Charge
• Enhanced Protection
• Primary Protection
• Fixed Protection 2012, 2014 and 2016
• Individual Protection 2014 and 2016
• Why is tax free cash lump sum now called “pension commencement lump sum”?
• What is an Uncrystalised Fund Pension Lump Sum (UFPLS)?
• Pension Protection Fund
• Financial Services Compensation Scheme
• Financial Conduct Authority
• TPS The Pensions Regulator
• Unfunded Schemes, Funded Schemes, Statutory Schemes,
• QROPS, QNUPS, PPP, SIPP, GPP, MP, DB, OMP, CIMP, COMP, SSAS, EPP, S32, Buy Out, Bulk Buy Out, Stakeholder, TVAS, TUPE, AVC, FSAVC, CSAVC, Exchange of Letters, Master Trust, Capped Drawdown, Flexible Drawdown, CPA, OMO and now the Lifetime ISA

We could go on and on and on.

It is the fault of successive governments and ministers with little or no knowledge of pensions, ducking the issues on State pensions and longevity, then deciding on social policy of this country that has made pensions the complex beast that it is. 

Perhaps Ministers and the Bank of England should talk to consumers and advisers at the sharp end rather than attend dinners and pay the blame game when it is in fact their fault.

Help for you:

If you need pensions help and advice from financial advisers that are not clueless, please do contact us.