Don't forget the fees: Devon pays £40m less than Stafforshire for the same pensions

When Keep it Simple, Stupid comes into its own.

The Financial Times looks into the murky world of public sector pension funds:

Neither Staffordshire nor Devon is exceptional; they are an interesting example because they appear similar. They are the same size: Devon had £2.68bn in March 2012, against £2.62bn for Staffordshire. They have a similar spread of assets in fixed income, equities and property, with a little money given to hedge fund managers. Both hold the same top three stocks (Royal Dutch Shell, Vodafone and HSBC) while three fund managers work for both counties. They follow the same public-sector procurement rules.

Yet Staffordshire paid £7.152m for fund management in 2011-12, while Devon paid £2.669m. And Staffordshire’s bill for administration came to £2.033m, while Devon paid £1.225m.

Over eight years, Staffordshire paid £38.2m more for an investment which returned 0.3 per cent less than Devon did. That's a pretty sizeable difference, and one which we'd ideally try to remove. Of course, the 0.3 per cent difference in returns isn't the sort of thing which you'd want to try and plan before-hand, because it could just as easily have been the other way round. But saving almost £40m for the same service is something which we generally want our local authorities to try to do.

The real point to all of this is that all too infrequently are management fees actually discussed in public. For many people – hopefully not the ones in charge of placing investments at councils, but certainly your average small investor – the only thing worth looking at is the annual rate of return. But management fees can alter that greatly, and unlike rate of return, they're something which can normally be known, and negotiated, in advance.

For pension funds, the lesson stops there. They're big enough, and competent enough, that so long as the client is negotiating well, they still offer the best chance of a good return. But for individual investors, putting a bit of money in an ISA for retirement, there's an even more basic piece of advice: you'll probably minimise your fees if you just get an index tracker. You might not get the best return (although you almost certainly won't get the worst), simplifying investments is an under-appreciated way to work.

Newton Abbot, Dorset, in 1955. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Leon Neal/ Getty
Show Hide image

“Brexit is based on racism”: Who is protesting outside the Supreme Court and what are they fighting for?

Movement for Justice is challenging the racist potential of Brexit, as the government appeals the High Court's Article 50 decision.

Protestors from the campaign group Movement for Justice are demonstrating outside the Supreme Court for the second day running. They are against the government triggering Article 50 without asking MPs, and are protesting against the Brexit vote in general. They plan to remain outside the Supreme Court for the duration of the case, as the government appeals the recent High Court ruling in favour of Parliament.

Their banners call to "STOP the scapgoating of immigrants", to "Build the movement against austerity & FOR equality", and to "Stop Brexit Fight Racism".

The group led Saturday’s march at Yarl’s Wood Immigration Detention Centre, where a crowd of over 2,000 people stood against the government’s immigration policy, and the management of the centre, which has long been under fire for claims of abuse against detainees.  

Movement for Justice, and its 50 campaigners, were in the company yesterday of people from all walks of pro and anti-Brexit life, including the hangers-on from former Ukip leader Nigel Farage’s postponed march on the Supreme Court.

Antonia Bright, one of the campaign’s lead figures, says: “It is in the interests of our fight for freedom of movement that the Supreme Court blocks May’s attempt to rush through an anti-immigrant deal.”

This sentiment is echoed by campaigners on both sides of the referendum, many of whom believe that Parliament should be involved.

Alongside refuting the royal prerogative, the group criticises the Brexit vote in general. Bright says:

“The bottom line is that Brexit represents an anti-immigrant movement. It is based on racism, so regardless of how people intended their vote, it will still be a decision that is an attack on immigration.”

A crucial concern for the group is that the terms of the agreement will set a precedent for anti-immigrant policies that will heighten aggression against ethnic communities.

This concern isn’t entirely unfounded. The National Police Chief’s Council recorded a 58 per cent spike in hate crimes in the week following the referendum. Over the course of the month, this averaged as a 41 per cent increase, compared with the same time the following year.

The subtext of Bright's statement is not only a dissatisfaction with the result of the EU referendum, but the process of the vote itself. It voices a concern heard many times since the vote that a referendum is far too simple a process for a desicion of such momentous consequences. She also draws on the gaping hole between people's voting intentions and the policy that is implemented.

This is particularly troubling when the competitive nature of multilateral bargaining allows the government to keep its cards close to its chest on critical issues such as freedom of movement and trade agreements. Bright insists that this, “is not a democratic process at all”.

“We want to positively say that there does need to be scrutiny and transparency, and an opening up of this question, not just a rushing through on the royal prerogative,” she adds. “There needs to be transparency in everything that is being negotiated and discussed in the public realm.”

For campaigners, the use of royal prerogative is a sinister symbol of the government deciding whatever it likes, without consulting Parliament or voters, during the future Brexit negotiations. A ruling in the Supreme Court in favour of a parliamentary vote would present a small but important reassurance against these fears.