Full Press Release - Pension Annuities - FULL REPORT - Feb-05

My name is James Stewart, I am included in ‘Who’s Who Of British Business Excellence 2003’ based purely on company growth figures. I am an accountant by profession and I was the MD of EuroCar DIRECT (UK) Ltd. until Nov-02 and am currently the Managing Director of Remortgage Now (UK) Ltd. & am also the founder of Financial Outrage, and as such I am now a Financial Services Industry insider & therefore a ‘Whistleblower’.

No-one has ever before examined ALL of the Financial Services Industry products by spreadsheet formulae as they are all supposedly trustworthy and run by honest senior management. I am now doing just that - product by product and exposing frauds, rip offs and scams as they are uncovered.

My previous Press Release dated Jan-05 highlighted the £983.5 Billion Pounds illegal Endowment ‘Massive Secret Hidden Additional Interest Fraud’ over the last 25 years, the £450.0 Billion Pounds illegal Endowment Compensation Fraud currently ongoing & the £768.7 Billion Mortgage rip offs and scams currently ongoing over the next 25 years, perpetrated on the British people, available on www.FinancialOutrage.org.uk .

In that press Release I also highlighted the ongoing Lloyds TSB’s ‘MUST NOT BE FAXED OR COPIED TO CUSTOMERS’ unofficial false and totally fictitious exchange rates which are still being used daily in all of their 1,600 branches and embedded in their computer system, which is the exact same fraud as the AIB Bank in Ireland which was declared illegal on 07-Dec-04 in Ireland.

The documents, summaries & detailed spreadsheet calculations on the attached CD ROM give absolute indisputable proof by standard mathematical calculations that 10 Million people are having their ‘Pension Pot’ at retirement age stolen from them by a conspiracy to defraud involving the Senior Management of all of the Pension Annuity Providers who have conspired together to offer fraudulently calculated false reduced pensions at around the same low levels that are on average £4,113 (78%) per annum less than they should be.

The 13 largest Annuity Providers listed on the FSA Web Site, under ‘Annuity Tables’ are as follows:- AXA, B & C E Insurance, Canada Life, Clerical Medical, Friends Provident, Legal & General, NFU Mutual, Norwich Union, Prudential, Reliance Mutual, Scottish Equitable, Scottish Widows and Standard Life.

Based on an Average Pension Fund of £100,000 at retirement now - 06-Feb-05, I have compared the Annuity Pensions, offered by each of them at retirement ages of 50, 55, 60, 65 & 70 for Joint Pension, Single Male Pension & Single Female Pension. The overall average, from the data examined, of the 15 different Pension Annuities fraudulently calculated by 13 of the largest Annuity Providers is as follows:-

A/ The ‘Average Pensioner’ will unknowingly become a victim of financial crime - a conspiracy to defraud - for the rest of their life and will be paid a token Pension Annuity of £5,924 per annum by the ‘Dishonest Annuity Provider’ in a dishonest industry, because no matter which Annuity Provider he goes to, all have conspired together to offer much the same fraudulently calculated annual Pension amount.

This annual Pension amount is £4,113 less (78.0% less) per annum than the annual amount that the average Pensioner should be paid had an honest Pension Annuity calculation been utilised throughout a truly competitive & honest pensions industry.

By fraudulently paying on average £4,113 (78.0%) less per annum than should be paid, this enables the Pension Annuity Provider to add £343 per month to the original Pension Pot of £100,000 every month and conceal & accumulate a Secret Hidden Additional Cumulative Amount’ of £306,516 from the Pensioner during the pension period by illegal fraud based on the massive underpayments made to the Pensioner combined with the effects of more and more additional growth/interest being accrued on an ever increasing fund STOLEN from the Pensioner.

B/ The ‘Average Pensioner’ SHOULD receive a pension annuity of £10,033 per annum from an ‘Honest Annuity Provider’, and would be £4.113 better off per annum and £91,178 (70.2%) better off overall.

C/ If the ‘Average Pensioner’ simply invested the money himself in a high interest normal Building society account at 5.35% and reduced the fund to nil over a safe life expectancy of 23 years the pensioner would receive an annual pension of £8,090, and would be £2,135 better off per annum and £45,292 (34.9%) better off overall.

D/ If the ‘Average Pensioner’, again simply invested the money himself in a high interest building society account at 5.35% but this time rather than paying himself the calculated annual pension of £8,090, but instead merely paid out the much lower amount of £5,924 per annum fraudulently calculated by the Annuity Provider, the ‘Average Pensioner’ would have a closing balance of £93,408 left in their account (to leave to their children etc.), based on the massive underpayments made and the effects of additional interest on an ever increasing fund. The Average Pensioner would therefore not be any better of per annum, as he is merely paying himself the exact same amount that the Annuity provider would pay, but would be £93,408 (72.0%) better off overall as the Pensioner would still have that amount in their account at the end of a safe Pension period.

This is an industry that only exists on trust, that has always had a duty of care and who should at the very least treat it’s customers honestly. They purport to be honest senior management running reputedly trustworthy companies, selling supposed honest products.

In reality they are cowardly financial thugs, hiding behind their junior staff, whilst setting up products and systems which bully the old, the weak, the uneducated and the vulnerable into having illegal fraudulent products which are being sold on a tissue of Lies - a total Sham - that they are for the benefit of the customer - when all the time they are methodically stealing their customers Pension Pot. Callously leaving the Pensioner with a retirement of abject poverty causing illness & misery resulting in early death, increasing the profit of theft as that reduces the period that the pension in paid.

The cruellest and most despicable obscene theft of all is the management driven deliberate, slow, systematic, premeditated and calculated theft by professional organisations that only exist on trust.

The average personal pension Fund at retirement age is £100,000. There are around 10 Million pensions involved. which equals an illegal fraud of One Trillion Pounds, which subsequently becomes a fraud of £3.1 Trillion Pounds over the pension period.

As these amounts are so massive, it is considered extremely unlikely that these balances are actually left in the Annuity Providers Actual Balance Sheet and Trading Accounts and investigations should be made by examining the authenticity of ALL individual payments, in excess of £25,000, made out of the Annuity Providers bank accounts over the last 25 years, with particular regard to skimming, laundering and other unauthorised payments. Freezing orders should be placed on the bank accounts of Annuity Providers to stop them removing any more money from their companies.

This illegal Pension fraud must be stopped, the senior management of the Annuity Providers arrested and the UK law immediately changed which forces Pensioners into unknowingly becoming victims of crime by having to take out an illegal and fraudulent annuity.

The law should be immediately changed to allow Pensioners to manage their own Pension Pot at retirement age.

How I discovered the financial Services frauds.

When I initially set up EuroCar DIRECT I had no idea which cars from Europe offered the largest savings against UK car prices. I simply set up a spreadsheet for each car manufacturer with the UK price, with formulae to convert currency add other charges, add taxes etc. so that once I had the firm European prices the models with the greatest savings were immediately highlighted and obviously they were the ones that sold well.

Once I set up Remortgage NOW I was astounded to find that there were no complete detailed overall costings on any financial services product available anywhere. Even when you go on supposed calculators they do not show ALL of the criteria used in the calculations. I soon found out why.

I applied similar spreadsheet formulae to mortgages, so that by simply entering the loan amount, interest rate and monthly repayment, I could easily & quickly compare any two mortgages, or indeed "the most enlightening way" by comparing any mortgage with the "supposed norm" standard Variable Rate for mortgages of 6.75% of the ‘Big Players’, and was immediately horrified at the results, indeed I was physically sick when I discovered the massive extent of the Endowment Funded Interest Only Mortgage Frauds as detailed in my Jan-05 Press Release with attached CD ROM.

I have now applied similar spreadsheet formulae to Pensions.

Private Pensions and Annuities - Precise Details of the Illegal Fraud

What happens to the Pension Pot (Fund), that you have built up over many years, when you retire?

Well, under current legislation you can’t have it. You are only allowed to take a lump sum of up to 25% at the very most, the rest must be paid as a pension (Annuity) from the company that you have saved with up to your retirement, or you can purchase a pension - they then call it an Annuity, from a number of other Pension companies, all of which offer much the same low amounts.

Yet according to the UK FSA web site the pension fund should manage your money for you and charge you 1.0% of the total fund value as a management charge each year that they are managing the pension fund that you are accumulating.

l found that it was impossible to get complete detailed overall costings, containing each of the four variables, from any pension company’s web site. There is no "Annuity Formulae Calculation. The monthly pensions currently quoted, on initial inspection, looked to be much less than a pensioner could earn by simply investing the money himself in a secure high interest account, and paying himself a monthly pension whilst reducing the balance over a safe life expectancy.

So in order to examine the honesty of Annuities we need to establish entirely reasonable and honest assumptions for the three variables.

An Annuity calculation, being calculated honestly, should simply be the exact same as a mortgage calculation, as it only involves the exact same three figures (variables) from which the fourth is calculated:-

It’s simply a mortgage calculation in reverse, only this time it’s your money that will be reducing each month over the period with interest added (less 1.0% management Charges on full fund per annum) and your monthly pension payments deducted.

Now we examine the four variables more closely.

We use an exact figure of £100,000 which is very close to the average Pension Pot.  This is the amount that is accumulated up to retirement age. This is an easy figure to enable us to check percentages more easily. All other amounts are pro rata.

Special Note: I will also be issuing another Press Release shortly which examines the build up of a pension fund to retirement age using historic FTSE growth data, historic dividend data & Pension fund set up and ongoing management charges to mathematically prove that an average person would ALSO be much better off simply saving their own money and that ‘Growth & Earnings’ are withheld from the trusting Pensioner.

However, all we are concerned about at this moment in time is to prove mathematically that the Pension and Annuity providers are simply stealing your Pension Pot.

(II) Life Expectancy.

In the 2001 Census - www.statistics.gov.uk - "By 2002, women who were aged 65 could expect to live to the age of 84, while men could expect to live to the age of 81" and "In 2002 life expectancy at birth for females born in the UK was 81 years, compared with 76 years for males." These ages are also confirmed by the UK Government Actuary’s Department: Life Tables - www.gad.gov.uk where you can download the Life Tables.

For reasonableness I have utilised a life expectancy of 84 for a joint male & female pension, 81 for a single male pension and 84 for a single female pension.

(1) The Annuity Provider Invests & Manages The Pension Fund

Prior to the 9/11 ‘Stock Market Crash’ the Average Percentage Growth was 14.8% over the previous 20 years from Jan-1980 to Dec-1999. Up to Dec-2004, even after the 9/11 ‘Crash’ the Average Percentage Growth was still 10.9% over 25 years.

It is reasonable to assume that a normal prudent investor would achieve the average growth, particularly over an extended period and that the ‘Pension Fund Investment Experts’ should be able to exceed that average growth when stock is rising, and be able to minimise losses and certainly miss out on the full extent of severe market drops over an extended period - Sep-2000 to mid 2002 - by selling stocks and investing in a safer lower return investment, i.e. bonds, high interest accounts etc. during such a period.

What about dividends? On the entire Internet I cannot find one single reference to dividends being included in any pension fund future growth calculations or published historic information, yet the FTSE indices give only the benefit of share price changes, not the dividends which historically have made up more than half of stock market returns, even more if always reinvested.

The FTSE All-share index Dividend yields are currently just below 4 per cent and there is now a good choice of shares that double that. Historically dividends were always higher than that.

Whilst it is considered entirely reasonable to assume that an additional 4% growth should also be added for Dividends received it is clear that they are NOT ADDED to Pension Funds, and are secreted, laundered, skimmed or simply disappear into untraceable oblivion, to the total detriment of the trusting pensioners.

Whilst is also considered entirely reasonable that 13.9% Growth (Plus FTSE 10.9%, Plus Dividends 4.0%, Less 1.0% Management Charge) should be utilised for Pension Fund Growth Calculations I have utilised an 8.0% Growth figure (after a 1.0% Management Charge) which is the most regularly quoted % currently on the Internet for future pension growth examples and calculations.

For information, there is some excellent financial information given by Nick Lough at www.money.msn.co.uk and good summary historic information at www.finfacts.com

(2) The Pensioner Invests Their Own Pension Pot

If he was able to, the pensioner could simply open a savings account with the highest interest rate currently available. After a mere 30 minutes on the Internet I easily found an account paying 5.35%. There were quite a few around the same rate, and anyone will be able to find them within a reasonable time.

I also found an account paying a much higher 7.0% with conditions, but because of the conditions did not utilise that figure.

For reasonableness I have utilised 5.35% as the interest rate for the Pensioner investing the Pot himself.

We now have reasonable and honest assumptions for the three variables utilised in the calculation of a Pension (Annuity) which enables us to calculate what the Pension (Annuity) should pay.

We already know the Pension Annuity offered by 13 of the biggest Annuity providers listed on the FSA Web Site on 06-Feb-05. We know it is up to date as they updated their Pension Annuity Tables on Sat 05-Feb-05.

The monthly Pension that should be paid is now able to be calculated and verified by utilising the above three variables - Pension Pot, Life Expectancy, Growth/Interest Rate.

As the amount of this fraud is so massive, I have completed a further three alternative honest and reasonable comparisons based on the pensioner having accumulated a Pension Fund of £100,000 at retirement age:-

(a) Fraudulent Annuity - actual monthly amount paid - an illegal dishonest figure.

(b) Annuity - monthly amount that should be paid in an honest calculation.

(c) The pensioner invests the money himself, and pays himself a monthly pension utilising and reducing the balance over a safe life expectancy.

(d) The pensioner invests the money himself and only pays himself the greatly reduced monthly pension that an annuity would pay, resulting in a large balance still being in the Pensioner’s account - the average balance left out of the initial £100,00 is a staggering and massive £93,408 on the 15 different pensions we calculated.

The 2 Key Documents that should be thoroughly examined are the Two Page Annuity Comparison summarising and quantifying all four options for all 15 Pensions selected and the Fifteen Page -One Page for each of the 15 pension Ages - comparing the FRAUDULENT ANNUITIES PAID with the real amounts that the Annuities should pay plus the 2 alternatives where the Pensioner controls their own Pension Pot.

KEY DOCUMENT - 2 Page Summary of the 15 Annuity Comparisons Comparing 'Fraudulent' Annuities with the Real Amounts that an Annuity SHOULD Pay and 2 Real Alternatives:-

Option A - Buy A DISHONEST Annuity
Option B - What An Annuity SHOULD Pay
Option C - Savings A/C at 5.35% Reducing Balance Over Pension Period
Option D - Savings A/C but only Paying Yourself the 'MUCH SMALLER' Annuity Amount

Appendix E - 15 Page Summary - One Page for each of the 15 Pension Ages - Comparing  'Fraudulent' Annuities with the Real Amounts that an Annuity SHOULD Pay and 2 real Alternatives

Option A - Buy A DISHONEST Annuity
Option B - What An Annuity SHOULD Pay
Option C - Savings A/C at 5.35% Reducing Balance Over Pension Period
Option D - Savings A/C but only Paying Yourself the 'MUCH SMALLER' Annuity Amount