http://www.bbc.co.uk/news/business-24153012

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.

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

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.

The answer to that question is contained in the previous post


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.

The big issue I have with pensions is annuities. What a rip off they are.
Draw downs are a much better idea.

This is why im greatful for my final salary pension. If it survives until I retire and of course I stay in the company until then. I know exactly what I will get.

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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.

The issue is that what some of the schemes do is that while you are paying in (be it via work or fully private) then its say 0.5% but if you stop they up the charges to 2% as they know that
a) Most people will never look at the performace of an old pension
b) most people dont understand what a 2% fee will do to the long term value

I'm of the opinion that a £500 PC today is usually a pretty good piece of kit, and massively better than £1,000 PC from 6 or 7 years ago. The new ones are faster and hold more data, and can do things that the old computers can't. This PC cost less than £500 (self build admittedly) and is running a bunch of 2012 servers on free virtualisation software. When I am bored of that, I will fire up Sketchbook Pro and draw a picture of a Penguin, SBP is on version 6 now, it has lots more features than version 1 had, but for the same price.

I'm happy with the VFM of what I'm wearing right now. I have quite a new shirt, it seems to work ok, and recently a pleasant lady commented on how much she liked it. The rest of my tasteful and not too expensive attire has been with me for a year or more and is in good nick still. This excludes my socks, which are cheap and disposable and cost probably less than a quid a pair. I'm lazy and CBA to shop around for boring things like clothes, so if I can achieve these successes, then so can you.

Starbucks and Costa are fine. They make ok coffee, and the price is fine unless you are a dire old Scrooge. It keeps me awake, and tastes nice to my uneducated palette. I've had what I'm told is better coffee, I didn't like it. The market provided an alternative which I and lots of other people prefer.

Cars might be a better example. I have little doubt that you would prefer a 1976 Ford Cortina, and feel that everything has gotten worse since that great chariot's heyday. But objectively the cost of a car has gone down (in terms of what it costs to purchase, insure, maintain and fuel a car to drive it a certain distance as % of income per person) while reliability,safety, features and comfort have improved dramatically. That outcome was made possible by competitive markets with low barriers to entry in tandem with fairly sensible regulation for safety and fuel efficiency.

The important thing is that both elements were required. Market exuberance creates bad things like hood ornaments and bull bars that kill pedestrians, regulators ban those otherwise the markets would be slow to phase them out. Regulators remove nasty [LIFTED] like lead from petrol and set common safety standards, without these things life would be worse. And that's how it is here too, except there is more alchemy involved. The blend of regulation that keeps spivs, idiots and chancers in line while allowing useful innovation and a decent range of products suited to varying tastes for risk is kind of impossible to nail down. But good consumer protection is definitely always needed.