What was in the money sections of the weekend’s papers? (24/05/2021)

Category: News

Revealed: £54bn in ‘cheap’ tracker funds charge double the headline fee

The Telegraph says that volatile markets in recent times have led to a surge in transaction costs in tracker funds. This has led to investors paying up to five times the advertised rate for their passive vehicles.

The newspaper says these additional costs have seen investors part with an extra £54bn in fees. They do not mention whether this is just for UK investors or what period this is over. However, it does say funds tracking the British stock markets incurred the most additional costs.

Knowing and managing the costs of any products or investments which form part of your financial plan is very important. We are completely transparent when looking at this and always try to get the best deal for our clients.

Pension freedoms: how they came at a price

The Times reports about the effects of pension freedoms, more than six years after they were introduced.

The newspaper references data from the Office for National Statistics’ annual survey of hours and earnings, as well as the National Archives, the Department for Work and Pensions, HM Revenue & Customs, and the regulator. It finds there is a divide between the public and private sectors and that young people and women are “sleepwalking” into retirement.

Campaigners are asking for a major overhaul of pension rules. The Times asks whether post-freedoms policies are working.

No matter what the rules are you should try to take as much control over your retirement as you can. The best way to do this is by getting financial advice.

16 million Premium Bond holders have never won a single prize

National Savings & Investment have revealed to The Telegraph that three-quarters of Premium Bond holders have never won a prize.

This translates into almost 16 million people (out of a total 21.4 Premium Bond customers) who have invested more than £100bn with the savings service. Premium Bond holders are entered into monthly draws for prizes worth between £25 and £1m.

“Unless you have larger sums to invest in Premium Bonds, or you are completely comfortable taking a gamble that your savings may not generate any return,” says James Blower from Savings Guru, “my advice is to look at other savings products.”

We would agree that unless you are looking to maximise your savings into Premiums Bonds (£50,000 per person) the odds are not great. However, as I write this the best rate available on easy access savings is 0.5%. Many might prefer the chance of a big prize to a minuscule rate of interest.

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