The title, unashamedly stolen from Jaws 2, doesn’t relate to sharks (well possibly a little bit!) and was prompted by me sitting in with two directors of a small limited company when their bank came to talk to them about pensions, both their own and their obligations under the pension reforms which the government is starting to bring in next year, but which will not affect them until 2014.

It’s a few years since I’ve experienced a bank selling pensions offering pension advice and rather naively I though they may have learned from their mistakes – endowment mortgages, high charges, poor performance, etc. Last weeks episode doesn’t leave me feeling very optimistic.

1. Tax relief was the key expression throughout the hour long meeting. At one stage it appeared to be the only reason for taking out a pension.

2. Mind you when I’m told by a pensions adviser from a High Street bank that the tax relief on company pension contributions is 31%, even though the true rate is 20% I started to see that pensions are still being missold. For the benefit of those equally puzzled by the 31% rate I can reveal that it is the 21% Corporation Tax relief (it’s actually only 20% now) and the 10% Tax Credits deducted from dividends. This is utter rubbish.

3. Later in the meeting the advisor salesman told us that some of his clients were receiving tax relief on their pension contributions at 63.5%! ( 21% Corporation Tax relief plus 42.5% – the effective rate of tax on dividends for a 50% taxpayer). This was pure fabrication but my clients didn’t know it and, unless I had been there, I wouldn’t have known what tactics the banks are still using to sell pensions.

4. The salesman then explained that the tax relief, coupled with the low charges on the money invested in the pension fund, plus the wide range of options available to spread the investment risks made pensions a very attractive investment. Strangely at this stage he didn’t discuss the investment performance of the pension provider.

5. He then mentioned the need to make a quick decision because at the moment the bank’s advice was free but from next year ( the introduction of RDR) they may have to charge thousands of £s.

6. Finally, he mentioned investment performance but strangely, didn’t have any figures which related to pension funds. The figures he quoted only covered the two years to June 2011 and surprise, surprise they were gross returns i.e before the bank’s charges had been deducted.

My advice when it comes to pensions has always been “Deal with an Independent Financial Advisor (IFA)“. Last week’s meeting makes me even more convinced that this is the only course of action to take despite what your bank manager may tell you.

is how I would summarise the recent Budget.

The 3CA Budget summary (on a sheet of A4) has slightly more information though!

The global retail banking chief executive of Barclays, Antony Jenkins, has been accused of living in a “parallel universe” after he defended the banking sector against charges of mis-selling and high-pressure sales tactics.

After all we all know that banks don’t try and sell us something we don’t want!

He made an interesting comment later in the interview saying  his staff are “very keen to get the customer the right product”. I would be a great deal happier if they were as keen to offer the customer the right advice!

His attitude is the reason why I refer people to articles like this.

The increase in ISA limits for those aged 50 and over although very welcome is not as straightforward as it first seems.

The ICAEW Tax Faculty has highlighted some pitfalls.

I was horrified to read in the Weekend FT that the Halifax is only paying 0.1 per cent on balances of less than £3,000 in its ISA Saver account.

The tax advantages pale into insignificance when you realise other ISAs are paying more than 3 per cent on the same investment.