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In my last blog I talked about why we should be mindful of how the things we say make people feel. So the theme of this blog is ‘stuff I’ve heard or read recently’ – and it’s not all auto-enrolment, or even pensions, related.
‘Do customers not understand the correlation between annuity rates and bond yields?’ Someone actually said that during a panel debate at a pensions conference once. You can imagine the response.
‘68 people injured last year between this shuttle and Gatwick airport’ Fact: That was a real sign as you entered the airport shuttle between the terminals, with an underlying message that you need to be careful. I couldn’t help thinking there was a bigger issue – the perilous road around the Amalfi Coast in Italy carries a better safety record.
‘Less than 13% of Defined Benefit schemes in the private sector remain open to new members’ Fact: The good news is that we’re seeing signs of employers offering good quality Defined Contribution schemes to replace them as automatic enrolment takes hold.
‘Those canoes are two million thousand million hundred thousand years old’ Rubbish: That was my five year old nephew last year at the National Transport Museum in Glasgow. They did look pretty old though.
‘My house is my pension’ Fact (maybe): But if you asked a financial adviser about a good way of saving for retirement and they suggested only your house, you’d question that I think.
Adviser: “I’ve thought of just the investment for you. You’ll probably pay two or three times its value over the lifetime of the huge loan you have to take out, you pay tax on it upfront which isn’t recoverable, the transaction costs are sizeable, as an asset it’s highly illiquid – yet currently quite volatile, maintenance costs are variable and you’ll maybe be able to borrow some of the value back when you retire. Oh, and you’ll live in this asset and be emotionally attached.”
Customer: “Great – that’s ideal. Thanks”
Tongue in cheek, of course, but I’d be concerned if that was the sole approach of many in saving for retirement.
‘You’ve got more chance of being hit by a falling coconut than bitten by a shark’ Fact (apparently): But highly dependent on where you live and your hobbies, I think.
‘Pensions are affected by the price of clothes’ Fact (potentially): Some pensions grow in line with things like the Retail Prices Index, and that’s connected with things like clothing prices.
‘If a trillion people on a trillion different stars…’ …each with a thousand packs of cards had shuffled them a thousand times a second since the start of time, then statistically, they still wouldn’t have covered all the combinations of cards you can have in a pack. Fact (according to QI XL).
‘Irregardless of the complexity, members need to know all the detail’ Rubbish: This was someone talking about pensions charges. It’s rubbish because, a) there’s no such word as ‘irregardless’, and b) lots of detail isn’t usually that useful.
‘The third consensus is dependent on the first as well as the second’ Dunno: It was the second bullet on someone’s first slide during the third presentation at a pensions conference. Still no idea what the presentation was about.
‘There are no books here at all’ Fact: This was graffiti under a sign for a multi-storey car-park.
‘What’s your favourite lamp-post?’ Little to say on this one, other than that it again came from my five year old nephew, along with questions on my favourite language, coathanger, electric plug, button (‘on’ or ‘off’), map and dentist (where the choices were Glasgow or Scotland). Can’t remember how I answered, but he confirmed that it was worth 39 points.
I changed the subject and explained the correlation between annuity rates and bond yields.