When cheap is not cheerful – Boris Bikes and uncapped liabilities.

Boris

 

Boris Bikes are wonderful. For £90 a year you can hurtle around the streets of London on the cycling equivalent of a Sherman Tank. All you have to remember is to dock your bike at the end of your trip and check the green light comes on.

Boris bike

Which is what I forgot to do at the Hop Exchange rack outside Borough Market on Tuesday night. In mitigation (m’lud) , it was stair-rodding down and I was legging it to the Market for some grub with my son – en route to an evening at the Globe. In short I was distracted.

But – and here is the rub, for the next 48 hours, my bicycle was AWOL, it had been re-cycled by another biker and did not get found till I had amassed a shocking £98.50 in late return penalties. The last time I felt this way was at Shaftesbury Library when I returned a book a year late.


 

The fine is perfectly fair, it is in the T&C of your agreement with “Santander Bikes” and there is an appeal procedure which I am following which may get me some relief.

The £98.50 is not crippling and probably reflects the trouble I put Santander (and their agents Serco to).

I remain a fan of Boris and his bikes despite the frustration of never being able to find or park your bike in the rain without something going wrong!


 

But here is the bit that interests me. For the 48 hours that I was racking up the fines, I had no idea where the bike was, when it would be found and what my final bill would be. In short I was incurring liabilities without any control on their management.

Although it hurt when I heard the bill, I did at least have closure. I was back in charge of my finances.


 

Boris Bikes are cheap, but they require a degree of attention to detail without which they can be expensive (a taxi from Vauxhall to Borough does not cost £98.50).

The real cost of the experience of losing the bike includes numerous calls to the Boris Bike helpline and my loss of productivity while I fretted. All these consequential losses add up.


 

The issue I now have with myself is whether to trust my ability to use the bikes going forward or accept that, cognitively impaired as I am, I should accept that I am a taxi and bus man going forward (I hate being stuck underground).

I suspect that this is precisely the mental process that many trustees of Defined Benefit pension plans are going through. Do I hand over to a Fiduciary Manager (and get an expensive taxi ride) or do I carry on propelling myself through the hurly-burly of financial markets, trusting myself not to screw up (with the occasional financial disaster).

I suspect that this precisely the mental process that someone approaching the exercise of their pension freedoms has to go through. Do I sell up to an insurer in return for an expensive annuity or do I risk running out of money?


 

And of course there is the x-factor of the appeal. Will my £98.50 be reduced for mitigatory factors (it was raining, I was in charge of my son, I reported the incident, preciously of good character).

I suppose this is where my analogy should break down , for if you screw up on financial markets, you should have no redress.

Except you have. Just as I am gaming the Boris Bike system by appealing, so anyone who screws up a pension transfer into drawdown can game the decision (if they screw up), by appealing to the Financial Ombudsman and all they have to do is pick the person to blame

Adviser

Provider

Ceding Scheme

We want things to be cheap and we want to be cheerful. Sadly we consider this need an entitlement and we rant and rave (as I have done about the bike) till we get our way.

Like spoilt children, we expect to get our way and for someone to wipe up the mess we create once we have moved on.

And after all that- am I withdrawing my appeal? I’m thinking about it and the more I think, the less I like myself!

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About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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