Dont believe what you read in the money pages!

If there was a prize for the worst article in the money press then the one recently by Richard Evans in the Telegraph “Pension savers could double their tax free cash” would be a strong contender – click here to view.

It is money journalism of the worst kind sowing the seeds of a “financial planning opportunity” where no such opportunity exists in the real world.  And along the way it confuses their readership – I know this because one of my largest clients drew my attention to this article and wants to discuss it at their forthcoming annual review meeting.

Creating a headline that suggests the availability of 60% tax free cash through combining what is today’s tax free cash with tax free cash that will build up over the next 20 years may be good journalism but any financial adviser worth their salt will know that this is just plain silly.

For this “opportunity” to have any validity the following would need to hold true.

  • The husband and wife (both aged 55) do not need to draw from their pensions to cover their outgoings until age 75
  • The wife works until age 75 earning at least £24,188 per annum – nowhere in the article does it mention that the wife needs to work until age 75 earning at this level

And a further prize would go to Vince Smith-Hughes of Prudential for providing the highly theoretical calculations and another to Merryn Somerset Webb who thought the article worthy of support in this week’s Money Week!

And Vince “Financial Planning options like these do not serve as yet another reminder of the value of financial advice while preparing for retirement” but simply serve to illustrate that the press are in the entertainment business and not really interested in whether their articles are anchored in the real world or that they confuse their readers.

If there are lessons in all of this it is don’t believe what you read in the money pages and nothing beats good real world financial planning advice which can be found here.

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