The Great Savings and Pensions Scam. An A-Z Guide. Today Q-R

Q – Questions. Too often, when being sold a savings product, we fail to ask the right questions. If you’re being flogged some kind of stock-market linked ‘Growth Bond’ or ‘Guaranteed Bond’ you need to find out who gets the annual dividends – you or the company selling the bond? If you’re looking at unit trusts, don’t get fobbed off by being told the ‘annual management charge’. You have to find out what the TER (Total Expense Ratio) is plus how much you can expect to lose each year in dealing and other more obscure charges. With pensions, you again must discover exactly how much you will actually be paying each year. Also, remember that most pension fund projections are total lies as most funds have never achieved anything like what they project. So find out what growth (if any) has really been achieved by the fund managers over the last ten years. But perhaps the most important question you need to ask is the “me and you” question – “if my unit trust (or pension or bond or whatever) goes up by say 3% (or 5% or whatever figure you think realistic) next year, how much of this 3% do I get and how much do you take in all charges, commissions and dealing costs?” If you ever can get an honest answer to this question, usually you will find that almost all growth on most financial products gets pocketed by those who are selling the product, not those who are investing. 

R – Regulator. The body mainly responsible for regulating the financial services industry has been the FSA (Financial Services Authority). The FSA’s budget has leapt from about £21 million in 1997 to over £400 million today thanks to the profligacy and incompetence of Gordon Liar Brown. But in spite of this huge increase and in spite of paying itself record bonuses year after year, the FSA has failed to prevent a long series of mis-selling scandals and did nothing to prevent the greatest banking collapse in British history. Following so many years of abject failure, the FSA is now being given a different name in a kind of Blairite rebranding. But it will no doubt continue to devour hundreds of millions of pounds of taxpayers’ money and continue to protect our greed-ridden, mis-selling, overcharging and utterly corrupt financial services industry against legitimate complaints from ordinary savers who have been fleeced.