The prolific '5 star success' of pension failure

9 out of 10 existing pension plans will fail to meet the retirement income needs of savers

Source: AEGON Retirement Report 2015

The shocking truth about the pension industry is that it has failed most customers on a profilic basis.

So why do firms like FTRC, Defaqto and Pension Playpen feel the need to celebrate such prolific failure by awarding 5 gold stars to the providers who have failed generations of savers, continue to ignore the savings gap crisis and the 'real' needs of 21st Century savers?

The Government wonders why savers are disillusioned and distrustful of pensions, yet goes about attacking the rules on pensions on a yearly basis, which of course any bufoon would know undermines confidence and adversely affects the buying mentality.

Whilst I applaud the Government's 'balls' to give freedom to savers, let's be honest, that legislation was not really about choice, it was about securing a 'quick buck' in tax revenues without it being labelled a 'tax raid'.

It was simply a better choice to bloody the nose of a lazy, feather nesting pension industry  than a 'big bang' tax hit for everyone. It cleverly only targets the pots at their most valued size, because by the time you reach 55 new contributions have little impact on growth until you retire.

The baby boomers were only too eager to utilise 'freedom' because of the prolific failure in pensions the 5 star brigade have dished out for decades.

But in the most important aspect of retirement planning, the accumulation phase, there is a savings gap crisis for the 40-55 year olds (also known as Gen X) earning between ￡35k to ￡100k who have zero 'feel good' policies from this Government - in fact it is all 'anti feel good' savings policies as Osborne snatches away at the 'low hanging fruit' aka Annual & Lifetime Allowances.

If this Government is indeed looking to nuture the savings habit in younger savers, then they need to stop all this nonsense with looking for 'quick buck' outcomes and look within the existing legislation of some 25 yrs to find 'win win win' scenarios (for savers, society and government coffers).

Michael Johnson's TEE 'party' is flawed economics, you can't solve a problem by simply juggling the timing of tax relief, or equalising the benefit so it is more 'PC' for the 'have nots', the outcome will ultimately be the same, or as our own research reveals, could be far worse for middle england.

By adversely changing the legislation now to acquire the ￡10bn of 'low hanging fruit' dangled by Johnson's TEE Party, it could very well prevent the 'have nots' from amassing ￡1m+ of additional wealth

Existing legislation since 1988 could have been used to offer pension savers a real incentive to save that is in line with common aspiration in the UK and one which has been core to all Governments since the late 70's.

Further, the need to cut CO2 and tackle climate change has been a core theme for the past two decades and again pensions could have been helping both savers and society achieve greater benefits via their workplace savings.

The only reason our 20,000 hours of self funded research can establish as to why two popular consumer and politically favoured themes have not been 'allowed' to blend with workplace pension solutions is that they don't suit the large providers (therefore commission fed IFAs), consultancies or TPA business models.

With such prolific failure delivered by all of these pension experts, it is clear to me that change and innovation is critically needed, whilst most of the aforementioned will doubtless continue to behave like the 3 wise monkeys.

If pension 'experts' believe that recommending a big provider with 5 stars for delivering 9 out of 10 failures is the recipe for a succesful, happy relationship with the 1.8m SMEs setting up pension schemes, Employees are in more trouble than they realise.

I for one will not be joining the 3 wise monkeys and ignoring the needs of 21st Century savers, nor will I be using the services of any 5 star rated providers whose computer systems and executive boards take no action to help the 9 out of 10 savers they have failed over the past 25 years.

It's time to begin again, this time more intelligently.