Just a quick note about Daybreak this morning. I was quite surprised when I got back to get a message from two journalists saying an IFA had complained that I’d made a mistake on income drawdown, and what do I have to say about it?
This was news to me as I hadn’t been discussing income drawdown and there’d been no mention of it as far as I was aware. So to be honest I had no clue what this was about.
Obviously that’s just a little confusing, and there’s always a worry that your memory of such a quick event doesn’t match up to what happened. So now the Daybreak video is online, and I’ve watched it back to try and find out what this is about and I think I’ve found it.
What’s happened here
The whole piece is about the worrying potential rise in insurance costs on 1 March due to the ruling that may come ending gender discrimination (see EU ruling could throw insurance pricing into chaos) primarily focused on car insurance.
We had moved briefly onto annuities, and obviously to explain the impact, as annuities are not a product not all Daybreak viewers will understand I was explaining what they were. I said:
"That’s if you’ve got a private pension fund, you’ve paid into your private pension fund, you have to convert it into an annuity"
Now, of course, I could’ve said ‘often have to’ but this wasn’t a guide to annuities, it’s a short hand description to get people to understand what annuities are and why they’re important in context of the point about price rises. And this is unscripted live TV, where word perfect isn’t possible.
Then Adrian said "You can’t just draw the money out?"
Now remember this question is an aside mention on a mainstream TV channel, not a CNBC, and my interpretation (I say interpretation, actually it was more my reaction and what my brain processed it to mean at the time – evidenced by the fact I wasn’t aware this could even be interpreted a different way until watching it back after the journalists enquiries) was he meant: "Can’t you simply take the money out of your pension fund and spend it like you can a savings account?"
I answered that"you can’t just draw the money" as I just wanted to get to the meat about the price rises and am having to talk to structured graphics as they animate.
I don’t think this was about income drawdown
Some people have interpreted his question to be about income drawdown products. Frankly, I would’ve been gobsmacked if I’d been asked an unprepared question about drawdown on the show – after all he used the term ‘draw out’ so that’s not what I answered nor even after watching back what I think Adrian meant.
Yet unfortunately the terminology used by either of us wasn’t as clear as it could’ve been – but that’s the nature of fast-paced live telly.
Now, of course, we could’ve gone into more detail, I could’ve said you can take 25% tax-free and there are drawdown routes, but this was all about a warning about insurance price rises and annuity price rises, not a guide to how pensions work (and there’s a man in the background winding me up saying I’ve 30 seconds left and three more points to go through).
So do watch this back in the context it was meant – a discussion about rising insurance prices – nothing else. At worst this was a live slip. It’s a little bit depressing that someone has decided to try to use this as a stick to beat me and the programme with (I hear from the journalist a ‘formal complaint’ may be made, quite unbelievable) when quite obviously it’s just an aside reference in a conversational piece rather than any predefined topic to run through.
Not all pensions professionals took this view, thankfully. I’ve already seen one message from a top pensions expert who saw a tweet on this from one of the complainers in the pension community, and then watched to see what was actually said, and couldn’t believe the fuss that was being made.
Apologies for any confusion
Yet don’t get me wrong, I strive for perfection in my work and this fell short of that. I’d hate to think I’d caused any confusion and wholeheartedly apologise if I did.Though thankfully I suspect it’s only those who actually understand the subject anyway who know enough to get confused.