Please make pensions more interesting
I have one thing to say to people who tell me that pensions aren't boring. It is this: yes, they are.
Everything about pensions is boring.
How pensions work is boring.
The people who sell pensions are boring. If anything, they are even more boring than the people who mis-sell pensions.
Defined contributions, auto-enrolment, tracker funds - they're all boring.
It's even boring to say that pensions are boring.
As with anything that's boring, the answer must be to cut it out of your life. But I guess there are some things you can't. They just happen. Like wrinkles and those coupons for free food you get with newspapers that you never use, pensions just happen.
However hard you try not to have a pension, someone boring will make you have one - and then tell you that it isn't worth anything.
It seems to me that there are two things you can do about this. The first is to die. We're constantly told that the problem is that we're all living longer and the economy can't support us. So die.
I'm not actually advocating suicide, though that has been legal since the early 1960s and you have to wonder why. Could it be that the government saw the crisis in the baby boomer bulge coming and made provision for those who wanted to do the economically responsible thing and top themselves? And, at much the same time, created personal-pension salesmen who could bore you to death?
No, you won't catch me promoting suicide. Not of the active variety anyway. The passive kind can be rather appealing - by which I mean filling the cellar with claret and drinking half a case of it every night, or taking up bungee-jumping in your 80s.
The other option is altogether more cheery both for those of religious faith and for those who believe that there is nothing more mysterious to life than an annuity rate. You just stop giving the pensions industry your money.
I can't believe how simple this solution to the pensions crisis is. It's almost beautiful in the simplicity of its structure, as if all the money in the world had just been collided at approaching the speed of light with a Higgs boson and for a milli-trillionth of a second the brightest of lights in the universe spelt out the message: “You don't have to do this.”
And we could all stop doing it. With a little sigh of relief, we could all go and sit by the river and read that 19th-century French novel we'd always meant to get around to and possibly sip a Nespresso Ristretto, because we wouldn't care whether we looked like George Clooney or not anymore.
It's as if we've all been bored into submission by the pensions industry.
Oh alright, I must have a pension so I must give some money to these pensions people, if only they'll shut up and promise to leave me alone.
Part of the problem here is pensions minister Steve Webb. He seems a nice enough boy, even if he does look like an account manager in a financial PR agency. Inevitably, this person can't pronounce their Rs properly and is probably really called Steve Rebb.
Steve believes pensions providers are tewwibly, tewwibly important. But to the rest of us they're just terribly, terribly boring and their imagination is so stunted that they believe that the only way for the pensions industry to make more money is to charge more in fees.
Also known as index funds, tracker funds replicate the performance of a stockmarket index (such as the FTSE All Share Index) so they go up when the index goes up and down when it goes down. They can never return more than the index they track, but nor will they lose more than the index. Also, with no fund manager or expansive research and analysis to pay, tracker funds benefit from having lower charges than actively managed funds, with no initial charge and an annual charge of 0.5%.
In exchange for any lump sum – usually your pension fund – an annuity is “bought” from an insurance company and provides an income for life. When you die, the income stops. Annuity rates fluctuate daily and depend on your sex (although from 21 December 2012 insurers will no longer be able to use gender as a factor when calculating annuities), age, health and a number of other factors, so you have to pick the right one and, once bought, its terms cannot be altered, so seek financial advice.