£40bn of our money is stuck in rubbish pension schemes
Is your pension hopeless? Are you destined to spend your dotage eating tinned stew out of an old hobnail boot? Well the Office of Fair Trading has ordered a crackdown on bad value pensions– after discovering that £40bn of savers money is stuck in schemes that will pay out piddling amounts.
Out of that 40 billion, £30 bn is in antiquated schemes with high charges, while £10bn resides in smaller schemes that are just as poor value for money.
5 million workers are paying into defined contribution plans, which are cheaper to run than traditional salary based schemes and are becoming increasingly popular amongst cash-strapped employers. The OFT also found that many employers don’t have the incentive to offer better value for money schemes to their workers.
The Department of Work and Pensions has agreed to look into whether new laws are needed to tackle the issue – with increased transparency top of the agenda.
Steve Webb, minister for pensions, said: "In particular, we need to ensure those already in pension schemes are getting good value for money, and will be actively involved in the audit of pension schemes sold prior to 2001.’
So knows, when you hit retirement age, you might be able to afford some stale bread to go with your tinned stew. It's the little things that count. *cough, splutter, die penniless*