Do you ever feel that just about the whole of the financial services sector (and anything related) is just ripping you off?
[Of course, anyone who's in the area will not agree. They will be benefitting from the employment opportunities, and possibly revenue.]
By this I include:
Government advisers etc.
Examples: We have been encouraged to invest in ISAs, which we are told are tax efficient. Yet most ISAs manage to change their rates after a while, so that whereas one year you thought you were getting (say) 5%, then in subsequent years you may get 0.05% or less. There is no requirement for the banks and providers to tell you this, other than on request. It is usually possible to optimise this each year or at the end of "maturity periods", but the effort of doing so is not inconsiderable, so I suspect that many will lose the equivalent of at least a month's interest, and some may not notice at all and lose a lot more. Older people, who may be the only ones rich enough to actually invest in these schemes, are quite likely not to read the small print, and "lose" a considerable amount over time due to the way interest is handled. [Of course they may not actually lose, but the value of their savings will be reduced due to inflation.]
Foilowing Thatcher we have also been encouraged to become share holders. Some people are lucky, and do really well, but I suspect that most people will either do badly, or if they are lucky will simply track the market. There is of course tax to pay on dividends (unless invested in ISAs), though with luck any capital gains can be managed to be within tax allowances - unless of course you are seriously rich, in which of course you will have to pay tax. I have heard however, that some of the clever ones manage to avoid paying much at all. [I'm not that rich, so I don't know how to do this ...]
In the event that share holders do invest in ISAs, rather than directly on the stock market, then the ISA provider will take a cut. Thus instead of paying the tax man, one pays the ISA provider. It is not impossible for this to cost more than simply agreeing to pay the tax!
During my lifetime I have noticed a lot of schemes involving tax where reducing a tax levy by one scheme simply puts a similar amount of money in the hands of someone else. Arguably I might rather pay tax, where at least notionally the money goes to support infrastructure.
There is obviously some need for banks, without which we are told we can't function as an efficient economy. However, my suspicion is that there are far too many people involved in the financial services sector. At an individual level some of them are "simply doing their job", but given that it supports quite a lot of people, all of whom have to be paid, and also then regulators etc. who have to check what they do, etc., then there are a whole lot of people who are arguably not very productive taking a perhaps not insubstantial cut from the work that some of the rest of the population do. On the other hand we may take pride in the fact that some of the wide boys in the City are not fleecing our own people, but managing to make a living by doing deals with people elsewhere in the world, which is obviously good for the UK economy.
Or have I got it all wrong?
I think that there is a huge assumption that somehow we should all be avidly interested in all of it. So that one knows all the tiny details and if we don't we are somehow not educated enough. I heard someone on R4 last week talking about how we should all be more "aware" and that unless we were putting aside 25% of our income in a pension fund we were being foolish
I resent having to waste my brain on remembering the minutiae of bank accounts etc and it's assumed that somehow the time spent "keeping in touch" with this is without cost.
Someone who spends 4 days going though their personal finance to save £20 is a bit of a fool IMV much better to invest the time in yourself or others.
You have not got it wrong at all...........
You are right Dave. These things are by design.
For instance we don't have a complex tax system just by chance...it was made that way.
Banks are there to get your money, as the Bof E and their friends on the treasury select committee showed only too clearly last week.
Private pensions are basically designed by the industry for the rich...for most people they are good way of making your own money unavailable to you.
Whatever they tell you, it's the same with Public Sector pensions. They take more off you than they give back - and then tell you the opposite, refusing to back up their false claims by withholding information. However, Dave and co. do a brilliant job of fooling the media and the rest of the population by repeating their fabrications of truth ad nausiam.
Originally Posted by teamsaint
But do you remember these things ?
when I speak with other members of my family they seem to think that knowing who your mortgage is with and what the rate is is worthy of discussion I honestly can never remember but am more than happy to have a lengthy discussion of how funeral music has an link to the wider values and aspirations of society, whether Beethoven ever saw the sea or even whether the phase vocoder in CDP is a more useful tool than the equivalent in GRM tools
Surely this stuff (the financial malarkey !) is there to facilitate the rest , with only a few individuals (and thank whoever that my accountant is one of them !) actually interested in the stuff ? I do find the more esoteric things about economics and maths fascinating though ...................
What seems to me to be overlooked in all of the posts so far is that every financial transaction of every kind involves beneficiaries and losers; it cannot be any other way. An employer borrows money from a bank to pay salaries off which deducations are first taken to pay to HMT and DWP and the employee receives that salary intead of someone else receiving it. ISAs come in two forms, (a) cash and (b) stocks and shares; HMT offers both as tax avoidance shemes and each is at the mercy of the vagaries of the marketplace, albeit in different ways. Every time anyone lends money to anyone else, or revalues a currency, of influences the market in any way, someone gains and other lose. Whilst I agree that placing too much emphasis on the importance of financial services in terms of one's own situation can be as pedantic as it is unnecessarily time-consuming, it is nevertheless worth bearing in mind at all times that the markets, the banks and other financial institutions, the Treasury and many other factors (not least the interdependencies of financial, fiscal and economic relationships between nations) do affect all of us all the time and it therefore behoves one to keep an eagle eye on such matters or pay someone else to do so on one's behalf, otherwise one could avoidably find oneself on the losing end all too often.