Opinion  

Savers could have lost £230bn in Brown’s pensions raid

Tony Hazell

Tony Hazell

Here are some ideas they may wish to adopt:

*Deal with customers openly and in plain English at all times;

*Keep customers informed of changes to their investments;

*Allow investors to keep more of their money while you take less;

*Cut or abolish charges that prevent investors moving their money to an alternative home;

*Look forward, embrace the investment world we live in, and build your business model around what is right and advantageous for the customer.

___________________________________________________________________________

Translation required

Recently I have harped on about using plain English. A woman wrote to me saying her husband wished to take his pension at age 55, but had been told by the Pension Protection Fund that this would not be possible.

Neither she nor he could understand the letter, so I approached the PPF on their behalf.

The investigation revealed that he could take the money at 55.

Here is how PPF explained it: “Payment of your compensation was incorrectly restricted, because we made a clerical error, the result of which was that we treated your payment as a pension, rather than compensation, and determined that it was insufficient to cover your Guaranteed Minimum Pension, which ordinarily would mean it could not be paid early. This should not have been applied, because compensation paid by us once the scheme has transferred to the PPF is not subject to such a restriction.”

Happy though they were, they remained none the wiser. In common with most people, neither has a clue what the Guaranteed Minimum Pension is or why it might affect an occupational pension.

The message: if, as an industry, you really want people to engage with finance and investment you must learn to speak in terms they will understand and to explain any complex terms you are forced to use.

Tony Hazell writes for the Daily Mail Money Mail section, he can be contacted at t.hazell@gmail.com