City fat cats are stealing our pensions

In the economic depression into which we're being propelled, the poor and powerless are paying for the mistakes of the rich and powerful.

Nowhere more so than in the grippingly exciting (sarcasm - I'll come back to that) world of pensions. The private sector, in the shape of the banks and the rest of the smug financial services industry, nearly destroys the world economy - and who has to clear up the mess?

Well, first of all, taxpayers have to stump up to save the banks. Then it's public-sector workers - that's all those greedy, fat-cat teachers and civil servants - who are told we can't afford their pensions after all.

Oh, and just for good measure, we're going to raise the state retirement age, so you'll have to work longer so that hedge fund managers can retire at 40.

Ripping off the public

I just wonder why people aren't more angry. Not standing-astride-a-broken-piano-in-the-City-singing-the-Marseillaise sort of angry. More of a write-a-letter-to-the-PM and think-about-voting-Green variety of distemper.

Part of the problem with pensions - and this is why I was sarcastic a moment ago - is that they are so boring.

That's why the pensions industry can get away with its monumental rip-off of the public. The pensions industry has actuaries, whose job it is to decide how long we're going to live. If you want to know when you're going to die, don't ask your doctor, ask an actuary. They're so boring, they're funny. People become actuaries because they find accountancy too exciting.

These people spend all their time working on your mortality, but apparently had not the faintest whiff of when the economy was going to peg it.

This has nothing to do with not being clever enough and everything to do with being too clever. You see, the people who run our pensions aren't interested in serving pensioners, they're solely concerned with serving themselves and the large companies they work for.

Backwards thinking

Cunningly, they call themselves 'asset managers'. This implies that they look after our assets for our retirements. In fact, big corporations are inclined to regard their pension funds as company assets, rather than the retirement benefits of their employees.


If that sounds unduly cynical, consider this: until the crash of 2008, the City enjoyed the longest run of uninterrupted growth ever. It was a 17-year bull market from the Major/Lamont recession, with just the dot-com wobble at the Millennium. You could argue that it went back further to the boom years of Thatcher/Lawson. The markets were throwing off cash and, with tax breaks, were sloshing it into pension funds.

So what did the big pension fund managers do, those brilliant 'asset managers' with their tracker funds and 'growth' and 'value' models?


They gave their clients pension-contribution 'holidays', that's what. They told these huge conglomerates that they had paid more than enough into their pension schemes to cover their liabilities, so they could have some time off from doing so.

Oh, and they awarded themselves enormous incomes and bonuses for being so brilliant. Same with public-sector pension pots.

And guess what? When the bull market ended with a crash, the pensions industry had run out of dosh. Where's it all gone, eh? That's the question we should all be asking.

The answer's simple. The financial services industry doesn't do rainy days. It only does dosh now, instant gratification. So where's the money gone?

Don't listen to all that claptrap about having to work until you're 108 because the world is awash with old people living longer (as if that's a bad thing). They could have managed those assets to take care of that.

No, the City and big industry nicked your pension money, while the going was good.

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Pensions have been a disaster for me... worked 30 years and now won't see half of what I expected to get in 10 years due to my employer "pulling the plug"

Absolutely correct. I am amazed to see this in print as I thought the Media were all corrupt as well. Good on you Moneywise!

Tou are wrong about your comments about the public sector pension pots. almost all of the public sector employees and their employers put suitable amounts of money into their pension pots. Unfortunately they had to give the money to the treasury to look after it, and the treasury instead of keeping it safe went and used it for goverment spending. If that had been a normal employer, people would have gone to jail, bu because it's the treasury doubtless someone got rewarded for the reducing the goverments deficit at the time the contributions went it.

So don't blame the public sector workers - blame the treasury!

Pensions are a wonderful field for sharks to operate in, because by the time that you have discovered you have been fiddled the "Asset managers" and IFAs have disappeared with your money.
One of the easiest, and legal ways to remove your money is to claim that they actively manage your pension fund to follow an index and charge a fee to do so(often 2% annually or more). They then just buy the ETFs that follow that index, negligible work for good money! This is so common that the financial industry calls the method "closet trackers". You can easily discover whether this is being done to you by asking for a list of investments that your pension fund is in. If they claim that it is "too difficult" or "not company policy" then suspect the worse. Move your pension to a low cost Sipp and buy the same ETFs which usually have a total expense of under 0.5% .
Any advice given by an IFA should be carefully checked, and if commission is involved, be extremely wary. Remember IFAs not only get commission when they buy something for you, but get an annual trail commission as long as you hold it.
That is probably why IFAs discourage their clients from investing in gold and other precious metals, no commission for them.
Check everything, mistrust everyone. It's your money and future so look after it.

The saddest thing about this situation is that we not only have an acquiescent (or ignorant) public involved, but also politicians who seem totally unable or unwilling to 'take on' The City and make them more accountable for what they do.

Until we have a revival of Socialism (which may now not be too long coming) the present rip-off by those at the top of society of those below them will carry on. This is a world-wide phenomenon and will continue until we have a world-wide revival of Socialism.