Personal Pension  

Prestridge advises IFAs to say ‘state pension is peanuts’

Prestridge advises IFAs to say ‘state pension is peanuts’

If you do not have the tools to save, you do not have true freedom: this was the thrust of Jeff Prestridge’s keynote speech at the FTAdviser Retirement Freedom Forum in Birmingham.

Speaking to a packed room, Mr Prestridge, personal finance editor of the Mail on Sunday and regular columnist for sister newspaper Financial Adviser, said: “Over the past 30 years pensions has gone from being boring to being front-page news and not always for the right reasons.

“But one message should be sounded loud and clear - nobody should be relying on the state pension. Not only will it be peanuts, but you will have to wait a long time for it.”

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He also condemned the way in which Chancellor George Osborne - “that true-blue Prime Minister-in-waiting” - seemed to be making up pension policies “on the hoof”.

Mr Prestridge added: “Despite a consultation called ‘strengthening the incentive to save’, Mr Osborne seems to be kicking this into the long grass.

“It is astonishing and embarrassing to watch him from the sidelines, as he plays political short-term football with people’s long-term savings. What a mess. What an embarrassment.”

He also raised the issue of fees, calling on the advisers in the room at the Crowne Plaza Hotel not to be ashamed or shy about declaring their fees.

Mr Prestridge told them: “Be braver on fees and disclosure. I have seen the huge financial benefit good independent advice has given to a family and it is worth every penny.

“It will not put off potential clients. They know they will pay a clearly defined amount and for this, they will get personal, stellar financial advice.”

Mike Norman, director of Norman Independent Financial Planning, asked Mr Prestridge whether the press could promote the value of advice by making fees and the reasons for them clearer.

Mr Prestridge replied: “This is a good idea but getting hold of quantitative data on fees across the UK can be tricky, which makes telling people how much to pay for advice difficult.

“What can be done is explaining to people through case studies or campaigns such as the former Institute of Financial Planning used to do with its Financial Planning Week, enormous value that independent financial advice can bring.”

simoney.kyriakou@ft.com