The Great Savings and Pensions Scam. An A-Z Guide. Today O-P

O – Opportunity. Most people today are constantly bombarded by financial firms offering investment ‘opportunities’ which will supposedly give us high returns and ensure a secure financial future. And with most bank accounts paying little to no interest, hundreds of billions of savers’ money has flowed into these ‘opportunities’. Some are plainly scams – property in Brazil, palm oil plantations in Indonesia and other such exotic and unlikely schemes. But the ones pushed by financial advisers (e.g. unit trusts and pension funds) and banks (e.g. growth bonds and guaranteed bonds) tend to look more credible. Yet if someone actually knew how to make money, why would they waste their time telling us? The only way these people know how to make money is by taking some, a lot or even all of our money. With most of these ‘opportunities’ there is only one certainty – the person selling the opportunity will make a lot more money than the person buying.

P – Pension pot. If you want a comfortable retirement, you’ll have to build up an awfully large pension pot. With annuity rates for an inflation-protected pension at just over three per cent, you’ll need £100,000 for a modest £3,500 a year pension above the state pension; £500,000 for a £17,500 pension and a massive £700,000 if you need a pension off around the average wage of £25,000. For people retiring today, nine out of ten have less than £50,000 in their pension fund, giving them a pension of about £1,700 for the rest of their lives. So there won’t be many world cruises for them. But if you’re a pension fund manager then, thanks to the forced generosity of the people whose money you’ve taken in all sorts of usually hidden fees, you’ll probably be a multimillionaire. And if you’re a council boss, hospital manager, senior civil servant or MP, you don’t need to worry about saving, your taxpayer-funded pension scheme is so generous that any ordinary person would have to save about £50,000 a year for forty years to get a pension like yours.