THE SECOND GREAT PENSIONS RAID

Evan



THE SECOND GREAT PENSION RAID

Current thinking is to cease to contract-out with effect from the current tax year. The effect of this is that you will then accrue an entitlement to S2P for each year that you remain not contracted-out. The accumulated Protected Rights fund to date, which is the proportion of your personal pension plan that relates to contracting-out, will remain invested on your behalf. But do we need to think again?



When you contract out of the State Pension you individualise your National Insurance Contributions and have these paid into your own pension pot where it remains your money under your control. Contracting in or out is an act of faith. Recent market turmoil may breach this faith. Do you still feel the State can or will be able to provide for you in old age?



Cash Gordon, the architect of the first pension raid has been at it again and redistributing wealth behind the scenes … the wealth of middle England. Is contracting back into the State Pension such a good idea?
The earnings related pension is being done away with and national insurance contributions redistributed on a massive scale to the benefit of low earners but to the detriment of middle earners and middle England. Better then to have your own money in your own pension pot?



For the full story see Steve Bee's excellent commentary:

 "Beeline" http://tinyurl.com/4srlc9

Comment: I would like to acknowledge the source of this data. My very good friend and IFA Commentator, Brian Lentz raised these issues many moons ago and following the excellent article by Steve Bee, I felt compelled to give a voice to these comments.





Regards

SIMON MANSELL

Temple Bar IFA Ltd



Thought for the day: Who guards the guards?


FREEDOM OF EXPRESSION - ARTICLE 10 THE HUMAN RIGHTS ACT 1998: This guarantees the right to pass information to other people and to receive information that other people want to give you. It also guarantees the right to hold and express opinions and ideas. Journalists and people who publish newspapers and magazines can use Article 10 to argue there should be no restrictions on what they write about. Artists and writers can use it to defend themselves against people who try to censor their work. Article 10 is a 'qualified' This means that the Government or a public authority may be allowed to restrict or interfere with the right in certain circumstances. The Government or the public authority must show that there was a clear legal basis for the restriction or interference. Its actions must pursue one of the eight aims set out in Article 10, which include: No 1 the prevention of crime; No.2 the protection of morals; No.3 the protection of other people's rights or reputations; No. 4 the protection of confidential information. It also has to show that the interference was 'necessary and proportionate'
(that it was done for a very good reason and went no further than it needed to).

This letter/e-mail is sent in Open Forum and any response may be held in open forum.

UK bank deposits not guaranteed

Other countries are quelling depositor fears by offering unlimited guarantees for bank depositors.

 

The UK government is unique in world terms because it is constrained by the FSCS, this is the 'fund of last resort' for investors and it is the financial services industry which contributes to it, not the government. If the liabilities were unlimited the whole regulatory system would fall apart and so would those it regulates. Who can we thank for that? Ask Mr Brown.

Banks in Ireland have a practical regulator

 

Their banks were in a worse state than ours, the only difference between that country and ours is that they have a sensible regulator! It therefore follows that we need to look at our lack of regulatory common sense, but sadly that won't happen will it Mr Brown?

 

When you think that London is the centre of the Universe for fancy financial instruments yet our 'Masters of the Universe' McKinsey regulators have once again failed to spot a dead parrot!

The banking crisis

The current banking crisis was caused Western governments massively expanding the money supply in a time of economic boom, and compounding that policy error by leaving interest rates too low for too long. This gave bankers the opportunity to use leverage and a bull market to expand their balance sheets completely out of line with their core capital and to use opaque contracts to do so. This was aided by inept regulatory systems with divided responsibilities working on prescriptive principles acting as a form of nationalisation ‘lite’. Bradford & Bingley, a demutualised building society, acquired aggressive and inexperienced management and went adventuring in the credit markets to over expand the business, based on the illusion of ever upward house prices. These debt positions will now have to unwind. Market forces are telling us this by the prices of bank shares and currencies. Western Governments are issuing so much Sovereign debt to fund bank bailouts that sooner or later there is a very strong chance that one will default. The answer to this is either inflation to erode the value of the debts, or a massive cut in state spending and a reduction in taxation. As cutting taxes and spending are completely counter to Socialist thinking they will not happen under this current administration, and because they are also counter intuitive it is unlikely that the UK voter will elect a Government committed to such policies. Hence more banks will fail and many innocent, thrifty and genuinely prudent citizens will suffer. Rules are for the guidance of wise men and the strict observance of by fools.

FW: [IFADU] Mandelson !

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From: On Behalf Of Brian Foster
Sent: 05 October 2008 08:52
To: IFADU - The IFA Defence Union
Subject: Mandelson !

Gordon Brown under pressure to bring some stability and confidence back into the financial markets here in the UK brings back from the political wilderness of European politics the man he feels will do just that and put New Labour back into contention in the run up to the election in 2010.

Sub Prime lending has certainly had an enormous amount to do with the downfall of banks across the globe and at the centre of this both here and in the States has been the appalling lending criteria adopted by banks with stories of nine times earnings and fabricated applications. Liar loans as they have become known have obviously been ignored by lenders anxious to increase mortgage books which they have neatly packaged up and sold on to unwitting (or stupid) investment banks.

And so it is quite a “master stroke” then for Gordon Brown to herald the return of a man (former enemy and now “joined at the hip”), who showed scant disregard to the pre requisite of being honest when submitting a mortgage application, to become the Secretary of State for Business, Enterprise and Regulatory Reform !

I have been out of the industry for quite a while now but I know how I would feel if I was still trying to run an IFA business struggling to earn a living and with unknown increases in the ICS liability over the next few years, that this man, whose political career shows no sign of disintegrating around him as he makes a third come back and did not have to worry about the actions that he took, be placed in a position where he will be lecturing businesses and of course at the heart of still further Regulatory Reform !!!

No doubt Mandelson will soon be telling you all how to treat your customer fairly and that if you don’t then you will be closed down with no chance of a comeback into your chosen career… EVER !!!!!!!

Brian Foster - Kingswood (ex IFA)

Financial Services Authority - regulation is bust - not fit for purpose

 

 

Financial services regulation in the UK is a mess. The manner in which regulation has been set up and run has added to the crisis. It has regulated the wrong things in the wrong way very badly. It has increased risk. The main achievement of the FSMA 2000 is that compliance departments end up running the business. It works like this. A banker has an idea for a new product. He takes it to his boss. ‘Before I even look at this, can you confirm that compliance has seen it and approved it?’. ‘No’. ‘Get them to check it and then come back’. ‘OK’. Later. ‘Compliance says it complies’. ‘Right, is it going to make money?’. ‘Yes’. ‘Get on with it’. In other words the bank or whoever never really thinks about the product. It relies on its compliance department. This is no good as compliance departments are staffed by people who are attracted by rules. They are especially delighted when the rule books are wonderfully, convolutedly prescriptive. They can spend hours playing games with the language and the rules. If the rules can be satisfied by a check box system, even better. Common sense is evident by its absence. The current regulatory regime is not only useless with its divided responsibilities it is useless because it is prescriptive and wildly over-complicated. It needs to be scrapped. Simpler regulation, or rather supervision, by experienced market professionals would be far more effective. The FSMA 2000 must be repealed.

FW: Financial advice not the answer to pension crisis: O'Brien

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From: Evan [mailto:evan.owe
Sent: 03 October 2008 12:52
To: 'Sharon.Fla
Subject: RE: Financial advice not the answer to pension crisis: O'Brien

I hope IFAs collectively refuse to pay for the stupidity of others. We have paid for the LAUTRO debacle and still are, enough is enough.

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From: Sharon.Flaherty
Sent: 03 October 2008 11:53
To: evan.owen@
Subject: Re: Financial advice not the answer to pension crisis: O'Brien

Hi Evan do you fancy sendin me over a quick comment on the prospect of IFAs who fall under the category of "deposit takers" being hit with FSCS increased levies.

Sorry for the short notice, just finishng up article for the web and thought an IFA representatve r esponse would be good.

Thanks.

Best regards,

Sharon Flaherty
Online reporter
FTAdviser.com
sharon.flaher
0207 775 6656

Visit us at: http://www.ftadviser.com

"Evan" <evan.owen@if 03/10/2008 11:37

To <Sharon.Flaherty@ cc Subject Financial advice not the answer to pension crisis: O'Brien

Hi Sharon

Many people have retired early because they were persuaded to save for retirement at an early age by a salesperson, by the time they are 40 it is too late.

These people are naive.

However, given the retrospective taxation of pension funds are they now no longer attractive for basic rate taxpayers?


Evan Owen
IFADU
Preswylfa
Dyffryn Ardudwy
Gwynedd
LL44 2EH