{"id":26223,"date":"2014-09-30T07:42:32","date_gmt":"2014-09-30T06:42:32","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=26223"},"modified":"2014-09-30T07:42:32","modified_gmt":"2014-09-30T06:42:32","slug":"pension-fund-performance-is-dismal-so-why-is-the-state-subsidising-this-failed-industry","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2014\/09\/30\/pension-fund-performance-is-dismal-so-why-is-the-state-subsidising-this-failed-industry\/","title":{"rendered":"Pension fund performance is dismal so why is the state subsidising this failed industry?"},"content":{"rendered":"

The FT ha an excellent article that anyone with an interest in pensions should read this morning. The argument is clear from the title, which is 'Fees are a scourge on pension funds<\/a>'.<\/p>\n

The article makes three things clear. The first is that fees in most pension funds are much higher than for direct investing, but the returns aren't necessarily any better.<\/p>\n

The second is that getting data on this issue is nigh on impossible, but a new report is trying to put that right.<\/p>\n

The third is that in the UK the average rate of return on pension fund investment between 2000 and 2013 was minus 0.7% despite the fact that these funds in the UK managed more money than UK GDP.<\/p>\n

And there are no excuses for this rate of return: by no means all countries delivered such poor returns. Denmark managed 3.8% positive returns over the same period and we live in an era of globalised markets.<\/p>\n

As the FT concludes from this dismal survey of UK pension performance:<\/p>\n

This could all be summarised by that well-worn question: where are the customers\u2019 yachts? The trillions of dollars worldwide invested in pension plans will continue to grow as more contributions roll in, providing a reliable source of revenue for the pensions industry and all its hangers-on. The outcomes for savers are hard to discover and much less certain. Is this the right way round?<\/p><\/blockquote>\n

I can't argue with that, except to note that this dismally failing activity receives a subsidy of \u00a350 billion a year from the UK taxpayer <\/a>and still cannot produce a return. The article, as is commonplace, makes no reference to this fact, but it should.<\/p>\n

The pension industry has failed the people of the UK.<\/p>\n

It has failed to deliver the funds we need for new investment.<\/p>\n

It has drained the UK government of funds.<\/p>\n

But it has made a relative few in the City very rich indeed as they have captured the wealth of the majority for their own private gain - as the stats make very clear.<\/p>\n

And it is now being used to promote inequality<\/a>.<\/p>\n

The time for major reform has arrived and the first question to ask is why the state is continuing to subsidise this so obviously failed industry?<\/p>\n","protected":false},"excerpt":{"rendered":"

The FT ha an excellent article that anyone with an interest in pensions should read this morning. The argument is clear from the title, which
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,29],"tags":[],"class_list":["post-26223","post","type-post","status-publish","format-standard","hentry","category-economics","category-pensions"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/26223","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=26223"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/26223\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=26223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=26223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=26223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}