Jim Armitage: Lamborghinis not needed, just a steer in right direction

Lamborghini dealers weep. MPs are probing how the pension freedoms allowing over-55s access to their retirement savings are panning out. The evidence thus far: not so well.

We’re two years in, and five times more tax has been raised for the Treasury than forecast.

That means people are taking out far more than policymakers expected and making bad decisions that leave them facing huge tax bills.

Frank Field, the MP leading the investigation, says £43 million has been lost to fraud. Far more will have simply been badly invested.

That’s little wonder when, according to the Financial Conduct Authority, a third of people withdrawing their savings took no expert advice.

But while the regulator is worried about this, its own rules make it inevitable.

Pension companies are banned from making “personal recommendations” to customers for fear they will greedily push them into inappropriate funds.

Yet independent advisers, the only ones permitted to give advice, are way too expensive for the average saver.

The result: millions are left in the dark, with little more guidance than a wet finger in the wind.

We need a sensible compromise, where pension companies who can see customers are in the wrong funds, or are about to switch into duff ones, can point out what’s bad about them and run through the other options.

A simple explanation of risk, and how returns would work through the customer’s life would stop millions of people being left impoverished in old age.

The FCA’s Financial Advice Market Review is consulting, but firms say progress is disappointing.

Field should give it a good, hard nudge. Save the Lamborghinis for those who can really afford them.

Why this jet stealth?

Gama Aviation is one of our more secretive companies. For nearly a year, the manager of private jets for the rich and famous decided it wasn’t in shareholders’ interests to inform them it was being sued by Dustin Dryden.

No small matter, this — Dryden created the current Gama by merging his Hangar8 operation into it.

But management at the AIM-listed company kept shtum. Eventually, the news leaked into the weekend press.

Cue a 10% share-price slide on Monday and, finally, a statement by Gama.

Today, it has an investor day. Shareholders should demand why it failed to disclose apparently market sensitive information, but I suspect they won’t.

They’ll shrug and say that’s what you get when you back AIM companies.

But it shouldn’t be. Valued at £100 million, Gama is no tiddler. Investec, BlackRock, the Pru and other big funds are investors.

They should push for better.