Dan Hyde: Test of pension mettle

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The tragedy of the steelworker pension fund scandal that we expose today is that they seem to happen time and again.

It’s as if the lessons of pensions mis-selling in the Nineties were never learned. Then, a feeding frenzy for advisers allowed millions of pension promises to be cashed in — just like what’s happening in Port Talbot.

With events like these, it’s tempting to point some blame at the victims. But this is not like being approached in the street and offered a new Porsche for £500. 

Steelworkers are being told they can have hundreds of thousands of pounds right now — an alluring prospect — if they give up a steady pension income in the future.

The Man of Steel statue in  Port Talbot. With so many steelworkers trying to figure out what to do with their pensions  many financial advisers in the  area are fully booked

The Man of Steel statue in Port Talbot. With so many steelworkers trying to figure out what to do with their pensions many financial advisers in the area are fully booked

Are they really being told just how big a risk they are taking and how complex it will be to make this lump sum last until they die? Not from what we’ve seen.

Part of the issue is that most people who have enjoyed final salary pensions through their life have had their faith in them undermined. 

They just don’t trust the paper they are written on. This has been compounded by bosses who have been able to raid pension funds and brush off obligations, Gordon Brown’s tax raid, and a stream of rip-offs perpetuated by insurers.

What many don’t realise is that a final salary pension paid in to over a working life is several times more valuable than the roof over their heads. 

In one example, a Port Talbot steelworker has a pension worth six times his property — and this retirement fund promises to rise in line with inflation and pay his wife after his death.

Giving up that incredibly valuable promise of an income for life for a lump sum that you have to invest yourself for the long run is a major gamble. It’s time steelworkers are told the truth and get the protection they deserve.

Year planner

I’ve lost count of how many letters and emails Money Mail has received about difficulties claiming refunds for holidays or cruises that you’ve had to cancel due to unforeseen illness.

This has become a major issue as more of us take foreign trips in retirement. The problem is that we book trips months in advance but rarely purchase travel insurance until just before travelling. It means you rely on a tour or cruise operator’s generosity for a refund if you can’t go. Fat chance.

My suggestion is to invest in an annual insurance policy if you take holidays every year. For two travellers in their 50s it costs an average of £14.94 to insure a single, two-week trip to Europe.

Yet for £24.78 — just £9.84 extra on average, according to data from comparison website GoCompare — you could get an annual policy. Make sure you declare existing medical conditions. Failing to spell out minor ailments may invalidate claims.

House call

When it works, the House of Lords can be a force for good. Take, for example, the cross-party movement that forced the Government to look again at banning cold calling on pensions, capping the fees charged by PPI claims management sharks and introducing a scheme to give breathing space to those seriously in debt. 

These measures, which have been written in as amendments to the Financial Guidance and Claims Bill, were resisted by the Government, former pensions minister Baroness Altmann says.

Banning cold calls won’t stop the crooks who want to get their hands on your savings, but it will send a message that such scams won’t be tolerated.

Crash point?

Cash machines are to disappear within ten years and RBS- NatWest is closing one in four branches. If we really are heading for a fully digital future, we need solutions for the elderly and vulnerable in remote communities.

Will the drive by NatWest, Barclays and other banks to have community banking vans and staff visit remote areas be enough to fill the void? 

Have you already lost all your cash points and find it difficult to do the shopping and pay bills? What else would help you manage? Let me know and I’ll tell the big banks.

d.hyde@dailymail.co.uk

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