FORM – the pension punter’s friend


I wrote a long and probably tedious blog this morning about why we should project pension pot values based on evidence rather than speculation. For those who got to the end- thanks. Here’s a simpler version that hopefully hits the spot.

Punters (which is what we are) generally have pensions picked for them, but there comes a time when they need to pick one pot to pay us a pension (or struggle on with multi-pot drawdown).

Punters have very little to base that decision on. Were they picking a horse rather thean a pension fund, they’d be able to buy , for a couple of pounds, a Racing Post which would enable them to see the performance of the horse, its official rating and the market’s view of its likely chances going forward.

Instead of being given this kind of information, us punters are told that we cannot and should not rely on “form” to make future decisions, instead we should seek advice. But when we take advice , we find ourself paying much more than the £2. And what is more, we are typically advised to bet on the horse the adviser has an interest in , suggesting that this is a far from perfect market. How many advisers will offer transfer advice when they have no finanial interest in the product  transferred to.

The other alternative we are offered  is guidance. But the guidance we get from Pension Wise is too high up the ladder of abstraction, to help us make the difficult decisions about how to combine funds and spend the proceeds.

So we need “form” on our pension pots and we just don’t get it.

We don’t get it from the IGC amd trustee chair reports that provide us with little more than platitudes about “value for money”.

We don’t get it from the providers who can’t tell us how our pots have performed or offer us a meaningful benchmark to compare them with.

We don’t get a league table that compares our experience with that of others (including our other pots).

I find it strange that we are allowed to take decisions on anything from choosing a horse to a house with detailed information on comparables, but that this is deemed unacceptable when it comes to our retirement funds.

We now here that the Financial Reporting Council want to provide us with a degree of “form” on the funds we have, by using what’s happened to them recently to help us understand what is likely to happen to them in future.

My long blog explains that this is a step in the right direction, this shorter one says that a lot more information could be contained in concise information on the fund’s future prospects.  The FRC’s aproach is a step to giving us proper form by focussing on what has happened. People may think that taking decisions on “form” is wrong, but isn’t  it  up to them to provide better information

This may sound uncomfortable to the people who own the pension providers we use, but at a time when the punter is starved of any relevant information, the FRC is our current best hope.



About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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