At a recent question and answer session, the pension secretary, John Hutton, let slip that the proposed National Pensions Saving Scheme has been designed to cut out independent financial advice, saying that 'the purpose of the NPSS is to reduce costs by removing highly tailored independent financial advice'
He also blamed independent financial advisers for the failure of the stakeholder pension scheme, saying that financial advice is 'one of the reasons that stakeholder charges are not below 1%'.
Our view
Can't you tell that Mr Hutton was appointed as Pensions Secretary late last year. That's right, a few months of experience. Does he have any pension qualifications? We think not. Based upon these comments, his grasp and experience of the pensions market is just less than the most junior of administrators in any financial adviser's office. Yet he is in control.
The reason people do not save is because they have been educated in the wrong way. Most children cannot even write a cheque when they leave school yet they know about Pythagorus and Boyles Law and how to make a nut-craker from scrap metal!
The reason people are scared of pensions is because successive governments have made the laws so complex that they need advice. The reason Stakeholder failed was because it was designed to fail. We predicted this as far back as 2002! The reason the Government are plugging a National Pension Scheme is because they have failed and continue to do so in getting people to save. Make no mistake - this government does not want you to save in a pension - they could not afford the tax relief that would have to be paid out if we all did save as requested.
People will always need advice - because of people in 'positions of power' who have no idea what makes the British Investor tick. The only way they will get people to save is by forcing them to. Don't blame advisers Mr Hutton - take a big look in the mirror.