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Revealed: how City fees are eating into our pensions | Business | The Observer

The presentation revealed how savings and pension pots were being chipped away as they were moved around by traders. A simple stocks and shares Isa can be top-sliced up to 16 times as it is traded around, it was claimed.

And while this practice and the costs were not noticeable when the market was on the up, the economic downturn was highlighting how much was being taken.

The average equity fund manager makes explicit that they are charging about 1.5% a year of the sum invested for their services, but additional hidden expenses average 0.3% a year and trading costs cut a further 1.4% off an investment. And the situation is getting worse, according to the analysis, which found that charges had increased by 9% in the last decade. The presentation added: "If the trend of diminishing returns and increasing costs continues we could soon expect negative returns on average."

During the presentation, which was later shared with the Department for Work and Pensions, the point was illustrated by the example of a saver who made £70,000 in contributions between 1994 and 2009, only to see the £46,000 in profit from the rise in the value of the FTSE 100 being consumed in its entirety by the financial services industry.

this is the 'cream of british industry', cameron's base. nicer bunch of guys you'll never meet...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Dec 19th, 2011 at 03:01:25 AM EST
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It's ironic - proof that private pensions are in a bigger crisis than public ones...
by Metatone (metatone [a|t] gmail (dot) com) on Mon Dec 19th, 2011 at 06:25:24 AM EST
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Sort of like the "Medicare crisis" here, which is systemic crisis in which Medicare comes out looking a hell of a lot better than the private sector.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Dec 19th, 2011 at 07:15:12 AM EST
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