Cover of MoneyWeek magazine issue no 777, Friday 22 Janaury 2016

How I learned to love the oil price crash

19 January 2016 / Issue 777

Oil is getting cheaper: use the slump to snap up long-term MoneyWeek favourite Japan, says Alex Williams. Read this week's cover story here.

PLUS:
• Is it time to get rid of central bankers?
• The monsters sucking cash out of the markets
• The woman who made millions from a mop


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Excerpt

Podcast: Learning to love the oil price crash.

In this week’s podcast, John Stepek talks to resources specialist Alex Williams about the crashing oil price, the state of global trade and why the popularity of ball bearings bears watching.

Merryn Somerset WebbEDITOR'S LETTER

Merryn Somerset Webb

Pensions: the counter-revolution

We are beginning to wonder rather about pensions freedom. When Chancellor George Osborne first introduced the idea that the obligation for UK pension savers to buy annuities with their money was to go in its entirety, we were impressed. We knew he had been pushed into it by the super-low interest rates that were slamming annuity rates – pensions freedom was just another consequence of the crisis.

Were also concerned that retirees would have trouble managing their own money throughout retirement: not everyone wants that sort of responsibility. Still, we love the idea of everyone making their own decisions about their money, and we figured the financial industry would find ways to offer savers a degree of security and flexibility.

But here’s the problem: pensions freedom isn’t much good if a) you are prevented from saving a meaningful amount and b) endless government and central bank policy mistakes mean you are misled as to the long-term value of your investments. To see what I mean on the second point, just look at markets: some of the distorting effects of the series of great global credit bubbles are finally coming back to bite stockmarkets.

I very much doubt that the first generation of retirees entering drawdown had taken into account the possibility that they could lose 10% of the value of their equity investments in two weeks.  The Lifetime Allowance and the changes to the annual allowance both mean it has become increasingly hard for the well paid (and even the averagely paid) to build up good pension pots over a full working life.

The changes we expect in the next budget will make things even worse.

• Read the full editor’s letter here: Pensions: the counter-revolution