The Great Savings and Pensions Scam. An A-Z Guide. Today S-T

S – Stock markets. These can only function if savers believe that they operate fairly. In Germany, the small companies market closed completely in 2002 when it was found that insiders had been defrauding savers by manipulating the market. But there is increasing evidence that the major stock markets are now also heavily rigged against ordinary people with money in unit trusts and pensions. The average time a share is held today is about 21 seconds. So that’s not likely to be you or me doing the buying and selling.  Hugely simplifying matters, we could say there are two main groups buying and selling shares – the ‘outsiders’ and the ‘insiders’. The ‘outsiders’ like ordinary savers, unit trusts and pension funds probably hold their shares for many years hoping for growth and dividends to give a reasonable return. The ‘insiders’ may be traders who only hold shares for a few days while they use all kinds of techniques like pumping-and-dumping, shorting-and distorting and pooping-and-scooping to get rich. Or ‘insiders’ may be the large banks and other financial institutions who use ‘high-frequency trading’ – computerised systems that only hold shares for milliseconds but take a cut every time shares are bought or sold. In this game, the ‘outsiders’ are increasingly being turned into mugs, while the ‘insiders’ make fortunes at the expense of the ‘outsiders’.

T – Three per cent. On average we savers pay around three per cent a year in fees, charges, commissions, dealing costs and other expenses to the people who manage our money. Some products are much more expensive, for example many people pay over 60% of the first two years contributions to their pension scheme. Some products like unit trusts or pensions may claim they only charge about 1% to 1.5%, but usually once you add in all the hidden charges, fees, commission, penslties and dealing costs you’re at or above the three per cent. With over £3.5 trillion in our savings and pensions, this three per cent gives financial services firms £105 billion a year, £400 million a day, almost £1 million a minute of our money to put in their pockets. This ensures that financial services insiders have more money, bigger houses, better holidays and flashier cars than the rest of us