Watchdog criticises personal pensions market

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Watchdog criticises personal pensions market

Fri 22nd Jul 2011

A government-funded report from Consumer Focus has lambasted the current state of the personal pension market, saying it causes "detriment to consumers".

The watchdog highlighted three areas of concern for the Financial Services Authority and the government to act upon.

Consumers are unnecessarily encouraged to enrol in riskier and costlier pensions, on-going fees, known as 'trail commission', are increasing ahead of their ban and overall information remains complex and often opaque.

However, Andrew Strange, director of policy at the Association of Independent Financial Advisors (AIFA), responded: "The report appears to be very thin on evidence to back up some of their claims, which are based on a great deal of conjecture and speculation and undermines the conclusions they draw."

Saga, which specialises in policies for over-50s, meanwhile welcomed the report, saying Consumer Focus carried out important work for the ordinary customer.

Director general Dr Ros Altman deemed the watchdog's report was a valuable insight into the current personal pensions market, believing customers often received poor deals yet remained "unaware of the realities".

Consumers are always advised to seek guidance and make use of tools like a pensions calculator, which can aid customers with their decisions.

Click here for more pensions calculator 

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