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Hate to say we told you so…

So, the Daily Mail has outlined some apparently serious current obstacles to the future of the much-vaunted pensions revolution – all of which seem to involve the financial services industry not wanting to give you back any of that cash it has so carefully invested for you.

Well I never.

We warned you in these very pages back in February, with some help from our chums at Chase de Vere (http://familybuildingsociety.co.uk/Blog/CouldIdrawmypension1.aspx) that the pensions industry would kick up a fuss with inventive excuses for why you shouldn’t take your money away from them. They like it as much you do.
But now the Daily Mail has done a proper job on them (http://www.dailymail.co.uk/news/article-3117474/What-pensions-shambles-Revolution-crisis-savers-barred-taking-cash-charged-1-000-just-advice-scandal-worse-PPI.html) and of course their excuses seem mean-spirited, unfair and nonsensical.

The lesson, it seems to me, is two-fold. Italy Retirement Pic resized

Firstly, it seems a few unwary have been making property purchases and other investments and/or purchases with the knowledge that their newly-liberated pension cash will be there to pay for it. Silly them, I say.
Why would you do that unless you actually have the cash in your account?

Secondly, it should come as no surprise to anyone who has been watching for the last 25 years that the financial services industry is capable of some scandalous behaviour – let’s see; pensions mis-selling, PPI, split-capital investment trusts, global default mortgage banking crisis. There’s a couple off the top of my head.

In these modern, more gentle times, financial services has tended to go back to its roots in days where you could go and talk to someone in a bank or a building society and be assured they would give you their best advice without trying to hard sell.

Like the Family Building Society, with its mutual status, there are other similar organisms out there who want to help and in doing so do great business. Great business means a good deal for both parties. Fair and square, if you like.
But at the end of a very long day any deal involving a large sum of money – the biggest investments you will ever make like a pension or a mortgage need careful thinking about. They need a bit of common sense.

To buy a property, for example, you need to know the money is available.

You couldn’t walk into Curry’s, for instance, and say I’ll have that 42-inch flat screen beauty, please, and I’ll pay you when I get the cash at some indeterminate date.

So why would you try to buy a house with nothing more in your wallet than a pension statement?
Answers on a postcard please.   

By Steve McDowell

 

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