December 2022
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Today we’ll give over £400m to the people who look after our savings and pensions. Are we mad?

Today, British savers with money in unit trusts, bank accounts, investments and pensions will hand over about £411m of their money to financial services insiders – salespeople, advisers, brokers and fund managers. That’s around £1m every minute. Then we’ll do the same tomorrow – another £411m – and the day after and the day after. The result –  the people who have got hold of our money have much bigger houses, more luxurious holidays, fancier cars and a much better lifestyle than the rest of us. Are we mad? Or just financially illiterate?

We’ve put at least £60bn into what are called “structured products”, usually sold by the main high-street banks. These promise say 100% or 120% of any stockmarket growth over 5 or 6 years and guarantee to return all our money if the market falls a bit. When selling this financial garbage, the banks usually fail to mention that 80% to 90% of the benefits from buying shares comes from the yearly dividends paid, not from rising share prices. And these products don’t give savers any of the dividends.

We’ve got about £550bn in unit trusts. These will claim that their management charges are, for example, 1.3% or 1.4%. They may even admit that their Total Expense Ratio (TER) is 1.75% or 1.8%. But once you take account of the initial charge, the 5% difference between the price you buy units and the price you sell them and various dealing costs, you’re paying nearer 3.5% or more. If you hold your units for 5 years, you’re giving 17.5% to the fund manager. If you hold for 10 years, that’s 35% of your savings going into someone else’s pocket. Of course, you believe your fund manager will make your savings grow. But 80% of unit trust managers underperform the market – you’d have been better just buying the shares in 5 to 10 FTSE100 or European big companies directly yourself  – Shell, GSK, Novartis, Roche, Unilever, Siemens etc.

And then there are SIPPs. Many people are choosing to save in a SIPP rather than an expensive old-fashioned pension with its rip-off fees. But then these SIPPs savers are putting their savings into funds where they’re getting charged about 3.5% a year. So they’re paying both the SIPPs fees (maybe 0.5% a year) and the fund fees – total 4% a year. The average growth of most funds is about 1.5% a year. So these SIPPs savers are losing 2.5% a year. Lose 2.5% a year over 20 years saving for your pension and you’ve given someone else 50% of your money. Save for 30 years   …..Aaarrgggghh.

Come on people, stop letting greedy, poorly performing financial services spivs siphon off your savings.

(I don’t mean to push my own books, but if you splashed out about six quid on my book PILLAGED, you’d probably save yourself several thousand pounds)

(btw, I do a talk called THE GREAT SAVINGS AND PENSIONS SCAM – and how to protect your money. I believe anyone attending will be able to save themselves and their family somewhere between £5,000 and £50,000. If any reader is a member of a club or some other group that might be interested in me giving this talk plus Q&A session, please get in touch)

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