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Do the ‘Tater, doo doo bee doo

Someone’s been listening to The Sage on pensions, haven’t they?

In a Labour press release, she said: “Someone starting out their career today would have to work until the year 2423 before they’d see a penny from the Tories’ tax giveaway to the top 1pc.

“At a time when families across the country face rising bills, higher taxes and frozen wages, this is the wrong priority at the wrong time.”

But these calculations were quickly debunked by pension experts who said the crude sums ignored the reality of how invested savings grow.

Jon Greer, of the wealth manager Quilter, said: “Labour’s calculations to reach this figure are rudimentary at best and crucially overlook the power of compound interest. This is not how saving works.”

A worker with a £107,000 pot, earning £35,000 and still contributing to their pension, would take around 40 years to hit the cap, Quilter said, just a tenth of Labour’s estimate.

But as Spud has so movingly explained, the stock market never does provide a return so how can saving through the stock market for a pension ever work?

Both Spud and Ms. Rayner missing that shares pay dividends, the dividends are reinvested and so that’s where the stock market return is.

And yes, this is where that original Finance for the Future paper with Colin Hines went wrong.They compared the returns of bonds with interest to the return of shares without dividends. No, really, they did. Which is why they were so fucking wrong of course.

6 thoughts on “Do the ‘Tater, doo doo bee doo”

  1. Jeremy Hunt has also been listening to Capt. Poatato according to the DT:

    The Chancellor said that the pension industry was in need of “big reform” […] allowing more money to be put into lucrative but potentially more risky assets such as infrastructure.

  2. @TMB – I’ll decode that for you (as if you need it)….”The Chancellor said that there appears to be a big pot of money that I can steal, with my spiv mates, then give a little back to the idiots to get voted in again.”

    Bastards. Lions are too good for ’em. Bring back the blood eagle.

  3. There seems to be something of a disconnect between different Spud posts on different days. But to draw them together neatly:

    Qu: When can your pension pot pass the previous lifetime limit, so that you benefit from its abolition but still not be one of the hated, loathsome 1%?

    Ans: When you are a doctor and your husband, with whom you are recently and inexplicably reconciled, is Professor Richard Murphy.

    Cakeism for SJWs.

  4. @ TMB and Hexchopper
    Jeremy Hunt is faced with a frightening level of government borrowing and his promise to start reducing it as a %age of GDP within five years looks unattainable unless he can pull a whole warren of rabbits from his hat. One possible rabbit is to get the private sector to pay for infrastructure projects so that the capital spend doesn’t get included in government borrowing figures.

  5. As we have a reputation for pedantry to keep up, should we not pay due respect to the argument that the blood eagle, though an effective form of intimidatory desecration of a corpse, was probably not, for elementary anatomical reasons, a fate which occasioned lasting suffering for the victim?

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