Dance of the veils on fees

PICTURE the scene. You are one of the 7.5 million holders of a personal pension, or are among the millions who have taken out an endowment policy to help pay off a mortgage.

That nice, friendly insurance salesman comes round to your house. He tells you that you should increase payments into your policy.

That's fine, you say: "In that case I would like to know how much this will cost me in commissions and charges on the policy you want me to upgrade."

"Sorry," he tells you. "Under the new disclosure regime for the financial services industry, I don't have to supply you with that information."

Your brow creases: "But I thought that the new regime lays down that from January 1995 you and your company have to do just that."

He replies: "The rules lay down that I only have to give you these details on any policy I recommended after January. If you increase contributions on `old' policies taken out before that date, the rules say I don't have to tell you exactly what it will cost."

This conversation is likely to be repeated in hundreds of thousands of homes throughout Britain in years to come.

In the process, it makes a mockery of the disclosure regime set up by the Securities & Investments Board, the City's top financial regulator.

Disclosure was to usher in a new era; one in which we the consumers would receive information to help us decide whether to buy a product.

This is not an academic issue. Figures show that up to 30 per cent or more of premiums paid go on company charges, thereby dramatically cutting investors' returns.

The SIB and the Personal Investment Authority, the financial services industry's regulator, have swallowed the arguments of insurance companies, banks and building societies. They said their computer systems were not up to delivering this information.

Rubbish. The truth is that they could, but don't want to.

There is only one word to describe regulators who allow insurers to drive a coach and horses through rules designed to protect us. Barmy.

THEIR Lordships have been pretty busy recently. Each time the Government comes before the House of Lords with bits of its Pensions Bill, a peer is guaranteed to stand up to amend it.

Several amendments have related to the position of divorced women who, it is argued, should be entitled to a slice of their ex-husbands' pensions in cases where they stayed at home and were not contributing to their own schemes.

The Government has listened in part. It wants to give courts the power to tell pension schemes to pay divorcees part of a pension when their former husbands have retired.

There are two problems with this. First, it ties a woman to her ex for life. Second, it raises the possibility she won't get anything if he dies before retiring.

As we write on page 10, there is a better suggestion. This involves giving the woman what she is entitled to right away. The Government should act.

JOY it is to be alive in Reading today. A market town once known for its bulbs, beer, biscuits and Oscar Wilde's Ballad of Reading Gaol, it is now described by guide books as having "little to delay the tourist".

Yet its residents are being given the ultimate accolade by Prudential. The mighty Pru has slashed the cost of its buildings insurance cover in Reading by 29 per cent, down from £180 to £143 for a three-bedroom semi.

Only one question remains: why is it that Reading's premiums were so high in the first place? And why, even now, are they higher than in other, more blighted, urban areas such as Liverpool, Birmingham and Manchester? I only ask.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones