JEFF PRESTRIDGE: A pig-headed mess fails us all on savings

By Jeff Prestridge


Asking everyone to wait longer for their state pension is all well and good. But it’s a shame last Thursday’s announcement in the Autumn Statement that the state retirement age was being raised was not accompanied by radical plans to encourage employees to save more.

Although the Government may argue that its policy of auto-enrolling employees into workplace pensions is a big step in the right direction, it really is no more than a shuffle.

Most of us need to save far more for the third of our lives that we are going to spend in semi or full retirement. And we should be encouraged to do so at every opportunity with an array of tax-friendly, low-cost and transparent savings schemes.

Planning for the future: Most of us need to save far more for the third of our lives that we are going to spend in semi or full retirement

Planning for the future: Most of us need to save far more for the third of our lives that we are going to spend in semi or full retirement

Unfortunately, for all their generous tax reliefs, private (company and personal rather than state) pensions remain mired in a tangle of rules and are susceptible to Government interference – as highlighted by the impending clampdown on lifetime and annual allowances.

As for Isas, the Government can’t quite make up its mind. On the one hand, it’s happy to be innovative and include junior market AIM shares in the Isa regime. But on the other, it displays sheer pig-headedness by refusing to make Isas more flexible by removing the restrictions on cash holdings.

We need far more savings radicalism from this Government. For a start, stop undermining pensions. And then for good measure, give Isas a makeover – preferably with a big hike in the maximum annual investment limit.

Tucked away on page 69 of the Autumn Statement was a little nugget of good news – confirmation that at long last the Government will this month sanction the payment of  £45 million of compensation to 9,000 elderly Equitable Life with-profits annuitants – who controversially had been excluded from the original £1.5 billion rescue package announced in 2010.

It was in this year’s Budget that the Government, helped by much arm twisting from The Mail on Sunday, finally acknowledged that this band of men and women had been as much victims of gross maladministration at Equitable Life as other customers.

It said flat compensation payments of £5,000 would therefore be made, an amount doubled for those getting Pension Credit.

The payments will bring much seasonal cheer to a group of people who thought they would go down in history as the forgotten victims of regulatory neglect in the 1980s and 1990s that allowed Equitable Life bosses to run the business into the ground, leaving customers’ savings plans in tatters.

A couple of days ago I contacted one of the victims, Peter Beresford of Littlehampton in West Sussex, to tell him the good news. He said he would  use the money to do a little work on his cottage as well as buy some roses for his wife Sadie.

Let’s hope Christmas comes early to 9,000 households up and down the country.

Ross McEwan, boss of the 81 per cent taxpayer-owned Royal Bank of Scotland, last week apologised for the latest computer meltdown – the fourth in 18 months. The debacle left many RBS, NatWest and Ulster Bank customers stranded in shops and on petrol station forecourts after their plastic wouldn’t work.

I would not be surprised if many of his customers now felt enough was enough, especially after a fifth glitch on Friday. My message to the disaffected out there is to ensure you ask for compensation if last Monday’s meltdown left you out of pocket – visit a branch or call 0800 151 0405 (RBS); 0800 151 0404 (NatWest); or 0800 046 5486 (Ulster Bank).

Once the money is in your account, I would take advantage of the new seven-day switching rules to move to another current account provider.

Brands such as First Direct, Nationwide, Norwich & Peterborough (part of Yorkshire Building Society), Santander or new kid on the block Metro Bank have long recognised you will only thrive if you put customers at the heart of  your operation.

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