Woman who got 86p a week state pension finds she is owed £42,000
A piece in the Guardian highlights how thousands may collectively be owed more than £100m after being underpaid State Pension for years.
The story looks at how until last year, Angela Jenner, 78, was getting only 86p a week as her state pension. What she had not realised was that when her husband retired, she should have automatically received 60% of the basic state pension. For more than 12 years she had been underpaid each week. She was owed £42,700 as a result.
This echoes a post we did looking at how someone believing they are owed money can claim.
The pension funds at risk of a dotcom crash
The Times get itself all worked up about the level of exposure to Technology stocks in default pension funds. It says pension providers are “ploughing” billions into shares in technology companies. This is happening even though there are “fears that huge valuations are fueling another dotcom bubble”.
One of the tech companies highlighted is Tesla which is currently worth over 1300 times its earnings. This might be sustainable over the short term. It also might not be. Ultimately it will be the market and the untold number of people that influence it, that decides.
No doubt there will be winners and losers in tech and across the investment landscape. However, most of this scaremongering could have much more of an impact than if Tesla and Amazon’s share prices underperform over the next decade.
Company pension schemes default funds are set up to provide a robust portfolio for the average investor. There are by no means perfect, but you can do far worse.
One solution the article suggests is for pension savers to move pots which could make it easier for them to pick their own investments. As we have seen this week this can go wrong.
“Moment of weakness”: amateur investors let GameStop’s losses count
The Financial Times covers how retail investors who have profited from a rally in a handful of stocks, including GameStop, are taking big losses.
The article covers a few stories of investors who have made large losses, after seeing the prices fall. GameStop has fallen by around 90% from its peak. In some cases, this was money they could not afford to lose.
One who had lost $42,000 said: “I built this. . . balance over a period of three and a half years, and in a moment of intense hype, in a moment of weakness for me, I ruined it all in one day.”
Where this leaves amateur investors is unclear. Humans are good at “self-deception” when it comes to both big wins and losses, noted Greg Davies, a behavioural finance specialist at Oxford Risk.
“It’s a hallmark of every catastrophe and financial bubble since the dawn of time,” he said. “Once we want to believe that something will make us rich quick. . . we are very good at filtering the rational information that expects them. “Periods of great upheaval amplify this behaviour,” he added. “With all the uncertainty in the world,” Davies said, “the kindling was very dry.”
A key quote in investing is that “Over the short-term markets are voting machines but over the long term they are weighing machines”. We encourage our investors to ignore short term noise and to act like true long-term investors.