Let us spend our pensions as we please

‘ IT WAS the best of times, it was the worst of times,’ Charles Dickens said of the French Revolution. Well, you could say pretty much the same thing of the Great Pensions Revolution.

It has promised so much for pensioners — and so far is proving a big fat disappointment.

Dickens wrote those words in A Tale Of Two Cities in 1859, coincidentally at the same time as many of our biggest life insurers first came into existence.

Publishing has progressed a long way since then. Insurance, not so much, it would seem.

Because at the heart of the failure of the new reforms is the antiquated way many insurers still run their business. I think my barber has got more sophisticated record-keeping and computer systems than some of these giant life and pensions firms.

Add to this lawmakers who still haven’t figured out how to regulate this new world of pension freedom — and you’ve got your very own financial disaster movie.

We’ve known for decades that life insurers were terrible at admin and dealing with their customers. It never really mattered before, because they never had to deal with the people who actually bought their products.

They were all sold through financial advisers and banks. But since the pensions revolution began, they’ve been bombarded with all kinds of questions from customers who suddenly are very interested in what they’ve bought. Many just can’t cope.

When we pass a complaint to a bank, solving it is usually as simple as typing a reference number into a computer and all your details will then pop up.

At an insurer, even if we send off all your paperwork, the specifics of your policy often can’t be found. Instead, frequently someone has to scurry away into the depths of a massive warehouse and pull your contract from a dusty old box. It may have been languishing there for decades. There are thousands of different pensions policies and the way they were drawn up — and the guarantees and clauses they have built in to them — vary hugely. So when you’ve got thousands of savers each making individual demands from contracts that are practically unique, the system grinds to a standstill. Then, you’ve got to add in the fear factor.

Insurers are terrified of being accused of mis-selling. They’re being asked to hand over huge sums of cash by people who have taken no financial advice.

As few as one in ten have even consulted the Government’s free pension guidance service. These firms are convinced that if you run out of money and are left impoverished for your remaining years, you’ll accuse them of negligence. So in many cases they won’t give you your cash.

This may be a failure of regulation — but don’t forget this is about insurers looking out for their own interests.

If they really wanted to make the freedoms available to you, they could.

We’ve currently got the incredible situation where the Government wants you to take responsibility for your savings, but the insurers won’t let you. And, for that reason, the sweeping reforms are proving a frustration for many who thought they’d have the chance to spend their nest eggs as they want.

Pensions Revolution? Pah. The only thing that is revolting in pensions is the treatment of loyal savers by the insurers and policymakers.

My victory!

A MINOR miracle has occurred. I have transferred son number one’s child trust fund into a Junior Isa! It took about six weeks, and it was remarkably straightforward.

I filled in a form with the company I was moving his savings to — Hargreaves Lansdown.

Then over the following weeks I received a number of letters updating me on the progress (including one sent because I had misunderstood one of the instructions and needed to sign another bit of paperwork).

At one point I received a letter telling me that, as the switch was taking longer than expected, they had contacted the child trust fund provider, F&C, to find out what the delay was. But then, a week later, the money arrived.

In normal circumstances I’d say that a six-week delay was unacceptable.

But having fought for three years to get the Government to change the rules to allow families to move their money out of child trust funds, the patience was worth it.

I hope other families follow my lead and move from these duff, high- cost investments into Junior Isas. I’d love to hear about your experiences.

Bad Apple

THE unveiling of the new Apple Pay service has underlined one thing I’m always waffling on about: how the tech wonks who design and market these new products just don’t understand ordinary human beings. They work in swanky offices, with all the latest gadgets and high- speed internet connections. Their smartphones and iPads are essentially extra limbs.

They may live their life in a tech bubble — but the majority of us don’t.

When Apple Pay was revealed on Monday, all the banks were forced to use the same excruciating sentence: ‘A unique Device Account Number is assigned, encrypted and securely stored in the Secure element on your device. each transaction is authorised with a one- time unique dynamic security code, instead of using the security code on the back of your card.’

Apparently, that was what Apple thought would explain how this new payment technology will work. It doesn’t inspire confidence, does it?

If these big tech firms want us to be able to use their new gadgets, then they’ve got to learn to speak in a way us normal folk understand.

Jargon and technical gobbledygook is designed to make you feel excluded. And that’s no way to inspire confidence among your customers.