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Who Took My Pension? Join in the debate

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Eamonn Walsh | 15:52 UK time, Monday, 4 October 2010

It seems barely a day goes by without another 'pensions in crisis' story.

Many firms have closed their final-salary pension schemes to new members and those that are in schemes are being told that they aren't paying enough. Add the fact that there's been an increase in life expectancy and it creates a worrying picture.

In Who Took My Pension? Panorama asks whether the fees and commissions that pension providers and fund managers take out of our pension funds are simply adding to the problems?

So rather than heading for retirement with a golden parachute, will many of us being left holding a lead balloon?

We welcome your comments on Who Took My Pension? Please do join in the debate.


  • Comment number 1.

    Please do join in the debate on Who Took My Pension?

  • Comment number 2.

    this is the main reason your pensions are very, very unsecure! (link/s bellow)

    I would suggest every one gets out of their pension as soon as possible, as you money would me more secure in a jar on the mantle piece, with large label saying pension pot on it.



  • Comment number 3.

    i am in the railway final average scheme 9 years in, i paid into salvesen final salary scheme for 4 years and i contracted out of serps for a few years and have now put that small 8.5k fund into a sipp with hargreaves lansdown, made up to 3k in 18 month on that.

  • Comment number 4.

    This is all very well reporting it but there's never a reason WHY we have to keep being fleeced in this country.

    A hyper expensive office block in Kensington is a parent to a scam company on the run from address to address. It stinks and the rich behind it are allowed to get away with it while the limp wristed FSA having a look at it.....YAWN! I am so angry.

    Holland know what they will get, they are an EU country. Why isn't it the same here?

  • Comment number 5.

    Yet again I am very disappointed with BBC's coverage on this difficult issue.

    1 - You need to look at disclosure requirements on Key feature Illustrations (this invalidates some of the programmes experts comments)
    2 - You need to consider the time value of money and fund growth effecting the amount of charges (which invalidates some of the comparatives)
    3 - Unitised funds DO PASS RISK to the individual. If this is not clear then the IFA has NOT done their job.
    4 - The more serious problem is that people do not save enough, and this is compounded with a low interest rate (current and long term) environment which reduces the conversion rate between pension funds and annual pensions.

    Programmes like this will only mean a bigger problem for the future, as state aid will only be cut.

    This is a very serious issue, and BBC has yet again gone for a tabloid view, grow up.


  • Comment number 6.

    I don't know much about pensions and the programme didn't really answer my main concern. I work for a large, reputable company and pay into the company pension fund. The company matches my contributions up to 7% of my base salary.

    My question is, can that ever be a bad investment, putting aside the possibility that the fund management is so bad as to almost beyond the realms of possibility?

    Is it possible to take my 7% elsewhere and do better than the 14% pot put into the company fund?

  • Comment number 7.

    Comment 3

    On the SIPP you've made a 3K on 8.5K; this programme complained about fund returns. It appears you've done well! However, should these funds fail to perform in the future it may be ERODED, this is not cash in a bank; it is subject to market movements (like stock market crashes).

    If anything the railway final average salary is more certain. Don't dis-invest it!

    Remember the Personal Pension Mis selling of the 80s?

  • Comment number 8.

    I have a Co-op pension and according to Panorama it is one of the poorest performers, what advice can anyone give me? Shold I keep paying into it?

  • Comment number 9.

    The whole pension sector is like the endownment scandal of a few years ago. It is quite simply a means of getting the ordinary man and woman to hand over their hard earned money to the city.These chancers then invest our money to make some more, charge us for the privilege then if we are lucky to live long enough they will give us it back in dribs and drabs.
    And like with the endownments if things do not go according to plan then they will move the goalposts and any complaints to the useless FSA will be met with a rejection.
    Far better to purchase shares and cut out the middle man

  • Comment number 10.

    Comment 8

    Check if you have a final salary pension; if so it is probably worth keeping.

    If not, and you want to change then see an IFA - get a fee based one.

    My guess is Co-op is probably decent, but maybe they have higher charges if it is an externally managed fund (like any insurer). Also, Make sure you switch from pure equity returns to safer bond returns as you approach retirement - otherwise you introduce a load of volatility on pension you will eventually receive.

    I am not an IFA, but people think what you do with your money.


  • Comment number 11.

    Comment 6

    7% employeer contribution sounds good to me (age dependent), If its in a defined contribution plan, see what options you have on fund selection.

    Any IFA advising on an external fund will probably need to make up the 7% your employeer puts in (assuming that you have a limited selection with your own employeer). That means to give you good advice the IFA needs to know someone who can outperform by 7% per annum (say 8.5% if you inlcude 1.5% fees) - I think unfeasible over a long term time horizon. My guess, stick with it. But go safer as you get older, you don't want volatility approaching retirement.

    THIS IS NOT FINANCIAL ADVICE, See an IFA for that, these are my personal thoughts, on the limited information I have.

    BBC - this is what these programmes do! The main issue is increasing finanaical awareness (probably something that should be added to UK's education)


  • Comment number 12.

    Comment 2

    nice links, but you may have confused the UK and US dynamics.

    UK insurers will only buy CDS if they hold the underlying bond (protection on default); and will only add protection on secure debt (gilts etc.)

    The main problem for insurer's really is the cash strain on posting collateral (I'd be surprised if the CDS's were uncollateralised).

    Looking an non-insurers, (say investment banks) they generally hedge their position. Even Lehman's unwinding didn't give to many problems.

    That said, there is no real substitute to due diligence on your investments.

  • Comment number 13.

    As a further comment on the pensions issue. I paid all my working life into a private pension, only to be told on retirement that my wife had not qualified for a full pension. (She stayed home and looked after the children). So they took most of my private pension to make up the shortfall. After all the contributions I paid I get peanuts to live on and I even pay tax on the remainder. The Tories are as bad as Labour on this so don't think its going to get any better with them.

  • Comment number 14.

    yet more evidence of the city ripping off the man in the street......its criminal.....where have the regulators been whilst this apparently legal theft has been going on........these people should be brought to account.........where in the HSBC pensions blurb dose it say that they will take 80% of your contributions in fees....is that not misrepresentation......they are all crooks.

    to my knowlwdge the value of the stock exchange had doubled in the past 20 years (invest for the long term we are advised ) yet my pension is worth half of what i was advised it would be......fees ?

  • Comment number 15.

    I missed panorama's episode on this and will be watching it when it comes on the iplayer - so forgive me if i have missed anything out.

    I myself work for a pension provider and i do hear on a daily basis from policy holders "it was pointless having this pension" and other quotes along those lines. All well and good that panorama highlight what fees and charges pension providers take from policy holders, but the fact remains which i cant fathem out why people don't understand, a pension is there to provide you with an income FOR THE REST OF YOUR LIFE, and with life expectancy increasing providers have to ensure that there is money in their pot to pay for their policy holders when they do retire in 20-30-40 years time, as they or we don't know how long we are going to live. A possible example of this is the state pension, you hear rumours that people who are just starting work will probably not get a state pension.

    At the end of the day, the point i am trying to make is that the pension providers cant tell the future and neither can the public or press, and as with everything, there is a risk. I think it would be a whole different scenario if a large provider, say Aviva went bust and couldn't pay out the income to their policy holders because they were not taking enough charges and commission etc 20 years ago.

    Plus there are other ways of saving, ISA's, bonds etc but the only thing that will guarantee you with an income for the rest of you life is a pension!

  • Comment number 16.

    Oh dear where on earth did they find those experts?

    The funds which obviously charged for their services (if they did have an index benchmark to match) did not perform as well as their index benchmark!!
    Sounded good didnt it?
    Trouble is indexes dont allow for any charges, so in most cases they will not, how can they if they do not include any charge?
    It is like saying a free bus trip cost less than a one where a person is charged over the same trip, of course it does.
    Most funds do not have an index to reliably match against, even trackers in some cases.
    1.5% charged pension are actually very cheap, that is the governments stakeholder (low charging initial cost).

    Many older pension have 'implicit' charges which take them over 3%.

    'dog funds' are a regular topic of conversation in the trade, but would very low risk funds fall in to their definition of 'dog funds'- cash ones for instance? Review your pension is the answer-and this will cost.

    However what the programme did not tell us is that some of these 'poor performance-high charging pension' have better guarantees such as annuity rate guarantees, which effectively can give an equivalent income of double the total sum in a pension of a low charging modern pension which has no guarantees.

    1.5% total charges per year in many cases takes 40% of the total fund?????? How on earth did anyone work that out to be the case in many pension cases?? Something else had to happen to reach that figure, a loss making pension never reviewed for most of its existence?

    It is not easy to justify in charges moving all pensions even with higher charging, we have complex equipment to calculate projections and I have never seen such easy to justify pensions for a transfer, if there were my job would be easy, so they arent using the correct 'transfer' justification calculations.

    That is the most unprofessional poorly researched programme I have ever seen which has just completely mis informed the public. I feel sorry and annoyed at the two or three professionals who allowed their faces to be used but were not the 'experts' speaking ie the one in the car etc.

    Really low quality programme must be struggling for viewing ratings at the BBC.

    Advice? Pay a few hundred pounds and get your pension reviewed by an IFA dont leave your pension in a drawer then see what you get when you retire. If you placed some money in a high interest bank account on a one year deal if you left it for 25 years do you think you will get the best deal for 25 years? Of course not, so think in a similar way with pensions there is often free switching of funds within the product to try to get you the best returns possible, wisen up and dont listen to these TV and newspaper 'experts' most are clueless.

  • Comment number 17.

    Panorama smugly omits to mention that all BBC staff are safe from such marauders as their pensions are guaranteed, gold plated, inflation proofed and still final salary calculated. And paid for mostly by people expecting to have to survive on private pensions.

    Worse, the BBC journalist in her summing said without irony, or perhaps understanding, that 'all' people/pensioners experienced this problem.
    All? She forgets the one third (and still rising proportion) of us who are pension aristocrats including all the staff who made this programme.

    The BBC editors chose not to remind the other two thirds of that by correcting her closing remarks. Why?

    Declare an interest in future please. We have to in public debate.

  • Comment number 18.

    Ok , so BBC highlighted the work of deVere and their pension selling skills(!). But did not mention that they are a offshore company, who are not directly regulated by the FSA and as such the clients have little way of making formal complaints.
    Hopefully this did not paint the impression that all UK IFA's operate under this system, as they are subjet to FSA guidelines.
    Also no mention of Retail Distribution review (RDR)which will mean all costs have to be made avialable to clients and fee structure to be put in place, making high commissions obselete.
    pension funds do underperform, as they are risk based!

  • Comment number 19.

    Jeremy Vine was the after dinner speaker at a recent Moneyfacts awards dinner that i attended in London. As he was handing out awards to all the leading Pension and Insurance companies, he seemed to have a somewhat different agenda to his Panorama persona. Cant imagine that had anything to do with being paid to host the event.........

    Think the BBC needs to remind its employees that before they start stirring things up in the usual unbalanced way, that they should not be seen to take payment from an industry one month and then be heading the Panorama program the following month with nothing good to say about them.

  • Comment number 20.

    Good points by many incl Framer above.

    It also occurred to me, if everyone had worked for free, the financial advisers, pension providers and those providing the funds, all worked absolutely for nothing AND we took their worst example of any single pension they had found to be true, plus their very very dodgy calculations to be correct (very suspect calculations) ie the worst 80% of fund lost as the case with ALL pensions, then the average pension would still only be £68,400 and that would provide under £3,000 per year typically as an income.

    Did anyone really think they would have a 'champagne lifestyle' on those contributions?

    The risk of not having an income above the min guaranteed pension income, ideally should be considered as well as investment risk, low risk funds generally provide lower returns, had most people gone low risk? If so why? Where in society did they get the idea that investment risk was their biggest risk when they took these plans out? It would not be from the adviser.

    So how does the BBC with their own lovely pension schemes hope to solve the income in retirement issue? Where are their 'experts' with solutions?

    Why can the public not afford pensions? The 1.5% charge in pensions or their National Insurance tax at 11%, income tax at 20-40%, VAT, Capital Gains Tax, fuel tax, road tax etc etc etc, if 1.5% manages to gross up to 40-80% of contributions how does this lot gross up from salaries???

    How much should be people paying for a roof over their heads? A survival requirement in our climate? People are paying many multiples of their savings to put a roof over their head so they are relatively poverty stricken in retirement.

    A little more thought would go a long way next time.

    PS: I would like to know who the two male 'experts' where sat in those plush offices (anyone know?), if they were from the FSA then God help us all, they have let clowns run the show.

  • Comment number 21.

    After reading these comments and the endless years of programmes exposing this issue and company's getting caught out time and time again. It really amazes me, why the govorment and gov bodies have done very little about the 'goings on' in this industry so far. It also amazes me why people are still investing in a pension scheme! The best comment on the blog is 'put your money in a pot on the shelf'!! There needs to a thorough naming and shaming all the these 'rip off' pensions and a list of approved pensions made or something along these lines. The whole thing is so complicated and with endless products available, it's very easy for people to be ripped off!

  • Comment number 22.

    FOR THE LOVE OF GOD...........

    Why do programmes like this have to be broadcast?

    The biggest problem we have in this country is not the issue of whether we are being charge 1%, 2% or 25% a year in our pension funds, it is that nobody is buying them, because people are being told that they represent poor value.


    They are still the best form of investment that an ordinary member of the public can make and as a country, we are saving around £50 BILLION less than we need to save in pensions in order to be better off. Stupid, misinformed programmes like this DO NOT HELP. They perpetuate a falsehood that has been put about by the 1% of people who actually go out and buy their own savings plans, but they are detrimental to the remaining 99% of the population who don't.

    Let me explain.

    With the exception of a mortgage, financial services products are not bought. They have to be sold. If this were not the case, Tesco Financial Services would be a market leader. They are not. You don't go to Tescos and buy a can of baked beans, a bottle of vodka and a pension, do you? It is a sad fact of life that most people need to be sold a pension. Therefore you need people to sell them. These people are called salespeople. They sell things. Specifically, in financial services, they sell financial services products. Surprising as it may seem, salespeople want to be paid to sell things.

    We have had 13 years of government initiatives designed to reduce the charges of pensions and to make it easier for members of the public to take out a low-cost pension directly. They haven't done it, have they? Why? I refer you to my comments above.

    We have a choice in this country, and it will get more and more difficult the longer we ignore it. We have to either bite the bullet and pay the salespeople, or we have to pay a lot more tax to pay the increased state pension burden. Nothing else will work.


    Rant over

  • Comment number 23.

    I am not sure why Jeremy Vine and Penny Haslam continually made references to "our pensions" and "our retirements".

    As their pensions are based on their final salary and are largely funded (including any charges) by the licence fee , maybe it is not their place to be quite so scathing.

    A more honest approach would be to refer to "your pensions" and "your retirements", don't you think?

  • Comment number 24.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 25.

    re 24 bodkin234

    you said 'Reading the posts so far, it seems the ones trying to justify the pensions industry and mockin g the panorama programme, are all IFA themselves who live off the fat commissions, these pensions provide'

    You are correct I am, and this is the most frustrating part of it, I am ethical, really ethical as are many other IFAs, but when the people who care about the public the most are the ones who live off the advice or product they 'sell' then you are absolutely correct to be suspicious.

    The FSA is nothing but a critic, it never has any solution to anything but loves to tell you all a story from history, anyone can find out what happened in the past, but what about advising for the future?? the roganisation apperas to be full of 'personalities' on huge wages (up to £700,000 per year) all trying to move on a get a even higher wage elsewhere, the word they always forget is the 'consumer', the 'public' how much the consumer can afford the consumers budget or anything to do with the consumers future. It is simply commission charges full stop.

    Remember too that the big product scandles, ie failures such as keydata and so on are from products authorised for release to the public by the FSA, the very ones they then do a report on later when they fail which takes them a year and a few million pounds to investigate. They couldnt have looked very closely at them when they released them could they?

    One or two consumer groups understand and are good but they talk about many things so their voice is lost or at least diluted.

    The financial reporters in the press in the main are not skilled at this part of the industry, there is some element of truth in what they say but much is incorrect and they generalise on purpose to get more readers.

    There is not a good solid programme on TV that just delivers the facts as they are without opinion, no press except one or two trade magazines which are no good for the public where accurate information can be found, the FSA's webpage is in a word 'crap', I mean hampers on a financial website come on, National savings products 'no risk'???

    All financial data and our Chartered Insurance Institute data clearly shows the number one risk to the consumer is not hitting their targets, investment risk is not top and investment charges is not top.

    But these programmes and the FSA just bang on and on about charges and investment risk.

    Frankly it is not good enough for the public, the public should know their main problems and have them in the correct order in their own minds they should not be confused by an FSA celeb trying to gain their promotion in the press, theiur success and the issue they have found should be in context so the public understand.

    A rogue cancer surgeon in the NHS does not mean that cancer surgery is all bad, a rogue cancer drug which over charges does not mean that all drugs or even that drug will not work.

    The messages need to be delivered in context, in level of importance and without ruining many other people's lives just because one person wants one moment in the spotlight to move on, be it a woman from Panarama trying to build a career or anyone else, it is wrong.

  • Comment number 26.

    Unfortunate that the BBC should broadcast such a biased programme. Look at one simple aspect of it - the programme stated that up to 80% of contributions could be taken in charges. Correct, but meaningless, and alarmist, in isolation.
    If you take the first of the £200 a month contributions and assume a 1.50% annual management charge (figures used in the programme) growing by 7.00% pa (figures used in the programme) for 40 years, the total charges would be £435.26 - almost 218% of the original contribtion. The value of the fund from that one contribution, however, would be £1795.95 - an average growth rate of 5.50% net.
    Compare that with the alternatives such as building society or bank. Because of tax relief etc, investing £200 in a pension requires earnings of £231.88. To deposit £200 in a bank would require earnings of £289.86. And, of course, banks and building societies also have charges - it's just that they don't tell you what they are!

  • Comment number 27.

    British expats are being targeted by self-styled financial advisory companies which operate overseas and employ British nationals or other native English speakers as staff. The staff style themselves as IFAs/financial consultants and provide what they say is (independent) financial advice. They recommend expensive front-loaded investments as retirement provision or as a means of saving for whatever purpose the client is most likely to agree to. They recommend the products of major investment companies. They are very successful in what they do. The BBC needs to explore this issue in further depth.

  • Comment number 28.

    Incidentally, the low cost scheme they spoke of in 2012, NEST is provided by an Indian firm called TATA, I think they bought Land Rover, it is said to cost 2% per contribution and 0.3% per year.

    Let us hope it is not TATA to our money and another bill for the UK tax payer.

    Why not one of our own companies?

  • Comment number 29.

    In response to post 22, absolutely right. Big insurance companies have been trying to get rid of commission based sales of pension schemes for A LONG TIME. Its their number one expense holding back on their profit margins. However without this commission paid, the salesmen (like myself)would go elsewhere...

    The Government NEEDS these companies to be still putting in big business in order to lower the burden that the average under-saving Joe puts on the state pensions. What poor Joe doesn't realise is that in the long run, less savings now results in a jeopardised pension pot and higher taxes later.

    I am an overseas British expat working as an IFA, with clients from the UK and every where else, thanks Alison (comment 27), and yes, I make more money than I ever dreamed of making back in the UK.

    However, I thank the Panorama program for their input into the what could be causing the problem with pensions worldwide. Unfortunately to the layman, they take 'money in a jar' as the best thing to do as a conclusion to this. Should we do a little research into economics you will see that this is by far the worst thing to do.

    I work for a very successful firm in the Far East, who take management of the portfolios as the essential part to saving and preparation for the future. All the different insurance companies offer very similar savings schemes who have similar charges structured in different ways. Who cares what the charges are if your adviser is making the most out of your pension saving? If 10%p.a. is the goal, then what difference does a 2% or 25% charge make? The only difference here lies in the CLIENTS greed to think they are entitled to ALL the money that is made on their behalf.
    My wife wouldn't agree that 15 hour days in the office don't deserve healthy commissions to make sure that we are looked after too...

    The real issue is that if the client doesn't do any research or even ASK how the money is managed or funds selected then they are exposing themselves to spank shop investment firms who will increase the charges as much as possible. Oh yes, they exist. Just like every car salesman, restaurant manager, clothes retailer and every single other industry professional that has tried to rip me off, and every other person that momentarily lets their guard down.

    Move to make upfront charges and do away with commission?? OK sure, then lets start charging for our work in the same way as a lawyer, some of the highest per hour rates going. This will only open people up to the threat of deliberately sabotaged pension schemes in order to run up more hours of work 'getting it back on track'.
    Putting your money in a pot on the shelf does not protect your savings from inflation. 10 quid today, is not the same as 10 quid in 10 or 20 years...

    By far the BEST thing about pension saving schemes is the SAVING part. Stop living off the state, and start owning up to your financial responsibilities and putting some money away. I ALWAYS offer my clients 100% allocation in zero risk cash markets or guaranteed fixed income funds, that will get them around 6%. After seeing the YTD of 17% for all our clients, they never choose this option...but then part of my commission goes to a TRAINED MARKET ANALYST to help manage all of my clients portfolios...

    Do your research. Want to invest in a new pair of trainers that will see your feet comfortable into the future?? Don't just buy the first thing you see on the shelf. Don't buy them online through ebay and be delivered a knackered old pair. Make a list of questions you want the answer to, before you approach the salesman, and if he can't deliver on these answers, go to the next one who can!!

    George Treacher, IFA, Far East...


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