Ian Cowie

If you want something done properly, it often pays to do it yourself. So it must be good news that as of 6 April, when George Osborne’s pension reforms take effect, it will be easier than ever to run your own pension fund, because you won’t be forced to retire as an investor when you cease to work for a living. Instead, everyone — not just the rich — will be allowed to retain ownership of their life savings and try to live off them by means of what is known in the jargon as ‘income drawdown’. But is a DIY pension right for you? Institutional funds are buying government bonds with both hands — despite prices hitting record highs and yields falling to historic lows.

As if to demonstrate that every silver lining has a grey cloud, next month’s top-rate tax cut also means there will be less help in future from HM Revenue and Customs to boost high earners’ retirement funds. So there are just a few weeks left in which people fortunate enough to be able to write a cheque for up to £200,000 can get £100,000 of it back, risk-free, from the kindly taxman. Such eye-stretching figures demonstrate why it really can be worth the bother of getting to grips with tax planning ahead of the 5 April fiscal year-end. Incentives to wrestle with the detail of annual tax allowances and exemptions extend right down the income scale. But ignorance can prove an expensive mistake when dealing with HMRC.

Tim Price: In a normal market, maybe. But not in this one UK base rate squats at 0.5 per cent, its lowest level in history — or since the formation of the Bank of England in 1694, which is much the same thing. With sporadic signs of inflation and patchy evidence of recovery, plus a new broom at the Bank of England who is expected to be boldly interventionist, the financial chatterati are transfixed by the prospect of the ‘Great Rotation’. This much-anticipated shift out of UK government gilts, and bonds more generally, back into equities reflects expectations that bond prices are due for a fall because interest rates must inevitably rise, while shares are overdue for an upswing. There’s only one problem with this thesis. It’s nonsense.

Like sinister Siamese twins, the words ‘pension’ and ‘scandal’ seem to have become joined at the hip. So perhaps it is no surprise that some very good news — perhaps the coalition’s most important extension of choice during its first year — was largely ignored by the media last month. Most people these days are deeply suspicious of all forms of pension scheme — and rightly so. Traditional insurance company funds have a reputation for high costs and low returns, with far too much of savers’ money sticking to the salesman’s shovel. Company schemes are being slashed as firms concentrate on surviving rather than worrying about their former employees’ old age.

Extreme stock market volatility and the crisis at Northern Rock have prompted some crass comment about how to look after savings in uncertain times like these. Probably the worst is the glib recommendation, so often trotted out during a panic, that you might as well keep your money under the mattress. But the only people to benefit from financial advice like that are burglars. Quite contrary to what pessimists might have you believe, anyone can still enjoy risk-free, tax-free returns comfortably ahead of inflation. Meanwhile, the more adventurous may seek to profit from setbacks suffered by others.