The OFT said pension schemes containing £40bn worth of savings are, or may be, delivering "poor value for money".

I'm sorry, this is private enterprise, with lots of competition in the market. How can it possibly be delivering poor value for money?

I'm sorry, this is private enterprise, with lots of competition in the market. How can it possibly be delivering poor value for money?

I've got a work pension but that's it, and I don't know the first thing about it... I'll make my own savings other than that I think.

Competitive markets invariably provide improved goods and services at increasingly advantageous prices when driven by consumer pressure for better goods and services at advantageous prices. Without that pressure they will do no such thing.

The system therefore works without onerous regulation in the field of coffee shops where comparing offers between Starbucks and Costa is easy. But it needs careful oversight in the field of consumer financial services, where in many cases comparison of offers is difficult.

Aside from a handful of utter free market fundamentalists, none of whom will you find either within this forum or at any senior level of the UK government, everybody knows this already.

There is indeed lots of competition in the market place but whether or not individual pension holders are benefiting from that competition is different as it depends on who is in control of the scheme and the level or levels of charges being applied.
I'm in my employers workplace scheme and the majority of the charges in the various funds are around 0.5% which appears to be fairly reasonably however there are funds with considerably higher charges kicking about as well.
A lot of people in defined contribution schemes just go for the default fund so they are relying on the charge being low and the fund performing reasonably and whoever is picking what constitutes that default fund making good choices.

It used to be that way. If you look at the state of a lot of markets nowadays, it isn't working like that. Just look at the computer market, the netbook pretty much destroyed the PC market for good, high quality devices at reasonable prices. You now either have the bargain basement POS models or you have high end machines which cost a lot of money, a lot being for the brand.

The middle ground of good quality, decent performance machines is disappearing, because nobody wants to pay reasonable money for a decent machine, they want to either pay next-to-nothing for a POS, then complain that it is slow or stops working after a short time, or you have the richer customers who want those "aspirational" products. For the "normal" user, who doesn't want the flash, but does want a decent machine there isn't much left.

That is just one example, but you find it everywhere. Clothing is another area, you have cheap "fashion" brands that fall apart quickly and you have expensive fashion brands that most can't afford. Those that want decent quality at decent prices are finding it more and more difficult. They either have to settle for cheap and cheerful or they have to fork out a fortune. The middle ground is slowly disappearing.

Starbucks and Costa are also not good examples. They are expensive and the coffee doesn't taste that good, from my experience. A coffee in a traditional café in Germany tastes much better than what Starbucks is offering.

The same is probably true about pension schemes, the people want to feel reassured they are investing in their future, but they feel robbed, when they look at their payslip and hundreds of quid are being taken for something they won't see for several decades. Therefore they go for minimum payments and schemes which advertise good results, without actually understanding what they are investing in.