Personal Finance: Nic Cicutti Column

PREPARE FOR wailing and garment-rending from the personal pensions industry in the wake of the announcement this week of the Government's proposed charges for its new stakeholder pension scheme. If Stephen Timms, the Pensions Minister, gets his way anyone who wants to charge more than 1 per cent of a fund's value each year won't be able to sell a stakeholder pension. More significantly, this charge will apply to minimum contributions of pounds 10.

Members of stakeholder schemes will be able to stop, start, increase and decrease contributions, transfer them at will - and the only charge from day one will continue to be 1 per cent of the fund's value. So if you paid in pounds 30 and - quite probably wrongly - decide to halt contributions, the fund manager setting up the scheme will only be able to charge you 30 pence a year to look after your money.

Oh dear. One can see why the financial services industry is likely to become upset at the notion that it will have to deliver these low-cost charging structures. Some pension providers will claim that operating stakeholder schemes will be highly expensive and that they won't be able to make any money at that level of fees.

That's nonsense, of course. There are already lots of pension providers who, in recent years, have bowed to the inevitable and begun offering low-cost, flexible pensions.

Moreover, the pounds 10 minimum premium, which many companies identified this week as the stumbling block in Mr Timms' proposals is unlikely to prove that great a problem.

As a spokesman at Legal & General, the insurance firm, said: "To be honest, pounds 10 is no more than a marketing tool. While it may be useful to suggest that anyone can set up a pension for as little as pounds 10 a month, we don't think this is anything like a realistic amount to pay in for those who want to prepare for retirement. Just as importantly, we don't believe many other people do too. Therefore, we expect the vast majority of policy holders will be paying in far more than that."

There is, however, one unresolved question. It is the problem of advice for those who aren't sure whether they need a stakeholder pension or if they should set up some other form of retirement planning option. Independent financial advisers, who are best placed to give that guidance, will complain that 1 per cent annual charges mean they won't earn anything by recommending a stakeholder scheme.

That's probably true. But then, neither would advisers earn anything by telling those eligible to do so that they should join their own company pension scheme, which is almost universally happens to be good advice. We've said so before, but it's worth repeating. If financial advisers want to be seen as professionals, this means developing the kind of relationship with us as clients which is not about selling products but about helping us make sound financial decisions.

IT HAPPENS at least once or twice to everyone. It's late at night, you are probably in a strange town and you are wandering around, looking for the right ATM at which to use your cashpoint card. And when you find it, it's broken down.

Until recently, there was a rigid demarcation between the rival systems on offer from different high street banks. Then peace appeared to break out. Everyone, we were told, would be on the same system, meaning that you and I could use our cards take out money from any ATM machine available.

Except that, as my colleague Andy Verity disclosed in The Independent last week, high street banks have decided to introduce secret charges for the privilege. Indeed, in several cases, they are restricting the available free ATMs.

Midland Bank, for example, would previously let its cardholders use Abbey National ATMs for free. Now, you will have to pay pounds 1 for the privilege. Abbey National, by the way, will charge pounds 1.50 to use any machine outside its own and the Midland networks. In the letters sent out to customers by Midland Bank, this rather inconvenient snippet of information was buried mid-way down the page.

These backdoor charges are a disgrace. Banks know that for most of us, switching to a rival (such as Nationwide) which levies no ATM charges, is an inconvenience we would far rather do without. They are effectively holding us captive.

Except that I detect a mood among a growing minority of financially astute consumers. When treated badly, they will move somewhere that offers fairer terms. If you feel the same way, Nationwide is definitely one to go for. As for the rest of us, when banks wonder why it is that they rank so low in public esteem, maybe someone should have a quiet word in their ear.