Comment on Pension Budget Announcement
More than four million pensioners over the age of 65 are to have their personal tax allowances frozen next year. The move, which was announced in the budget means that the amount of money they will be able to earn before becoming liable for income tax will not rise, or move in line with inflation.
The change has been made as part of an effort to simplify an overly complex system of tax allowances. However, it will affect millions of people who rely on their savings, the same people who, for the last three years, have already seen the income from their savings hit by historically low interest rates.
In this environment it is more important than ever that people can be certain their savings are safe and their investments are working as hard as possible. But too many people are seeing their returns eroded by hidden fees and charges. All too often people are not being told the true cost of their investments. It’s time for a cultural shift in how savings and investment companies treat their customers.
The Government has taken steps in this direction by pledging to improve transparency and competitiveness in the ISA market. It is has highlighted the need for improvement in transfer periods and information exchange. These should be welcomed. But they do not go far enough. There needs to be total transparency on fund fees and management costs to rebuild consumer confidence and increase levels of consumer saving. It is scandalous that only 19% of consumers know the full fees and charges on their investment and savings products, and 84% agree that fund managers should be required to disclose the full breakdown of fees incurred.
Unless the Government and fund management industry takes notice of the groundswell of support for greater transparency of investment fees, consumers will continue to vote with their feet and either do it themselves or simply stop investing.
Posted By: True and Fair, 5:39 pm