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What can we learn from the media?

Fascinating, this week, watching how the quality press has been reporting various behaviours around the immediate aftermath of the pensions liberalisation.

We already knew what was going to happen, of course, because it was widely reported and fairly predictable.

Firstly, pensions companies - which generally move at the speed of a tectonic plate - were widely rubbished for making it difficult for their customers aged over 55 to apply the new law to access as muPensions_reformsch of their long-term savings as they liked, almost without penalty.

A raft of new rules which came into force on April 6 ended the need for savers to turn their pensions into a lifetime "annuity" income. The over-55s were told they would be able to take out as much of their money as often as they liked.

The Telegraph and the Daily Mail reported (as did we http://familybuildingsociety.co.uk/Blog/Hatetosaywetoldyouso.aspx) that pensions firms were imposing restrictions and/or penalties in the form of fees and redactions if they tried to withdraw funds before a specific “retirement date” – typically your 65th birthday but sometimes as far away as 75. Millions of people, said the Telegraph, have found accessing their retirement funds much more difficult than they advertised.

A campaign to make these freedoms actually work swiftly ensued and, according to the same title, earlier this week the Chancellor himself intervened and promised to kerb ‘excessive’ and ‘egregious’ exit penalties for savers.

Naturally, as with all rapid and decisive Government interventions there will be a period of consultation before we know exactly what the capped fee structure will look like, but it’s a heck of a good start. Of course any pension or investment company wants to hold onto your money because the money they get is simply a percentage of your money.

Yet The Times reported only this week that more than £1bn has been taken or transferred out of pension funds since April who have been on a spending spree on cars (equivalent to £50m a month) and property purchases (£100m) as well as home improvements.An interesting £186m has been spent on holidays alone by more than 60,000 people who have taken advantage of the new rules, reported Travel Weekly.

All these are estimates and from a single source, the FTSE100 behemoth investment and pension manager Hargreaves Lansdown. Timely. With the greatest of respect to Hargreaves Lansdown – which is collectively and somewhat jealously known by its competitors as The Deathstar for the sheer dominance created by its imposing size – this research can hardly be viewed as objective.

In PR terms, creating reports specifically to generate headlines is as well-worn and easily achievable a technique as honey trapping greedy politicians with bags of cash.

Nothing wrong with this of course but perhaps you should rely on the sagest advice of them all – that which came from your Mum.

Don’t believe everything you read in the papers.

By Steve McDowell

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