A tsunami buoy

AgeWage has been a lonely beacon bleeping a signal of tsunamis over the past 8 years.  The warning is that the billions of money building up in workplace pensions is not assessed by trustees, employers or members for the value it gives for the money that’s been contributed. For most people, reading a VFM report should be a comfort not a bore. A reminder of what is going right and the perils of what could go wrong.

Things are changing. Patrick Heath-Lay who had an uneasy relationship with  AgeWage is coming round to the view that Value for Money is something that people should have a view on , at least as their circumstances are impacted.

People’s want us to work on simple ways of assessing whether we’re getting any value.

Here is his and People’s Partnership findings – not so compelling

Here are the value for money basis’. I have to admit I find them hard and I’m into this.

In his speech in his conversation with PLSA (Above) , Patrick stresses simplicity, the trouble is there isn’t much in the metric designs and findings

For savers in defined contribution (DC) schemes,here are the ways suggested to establish whether a pension scheme is any good. The text in italics is from the report.

Assessing pension value can be challenging. Value for Money (VfM) spans performance,costs, and service quality—often presented in ways that are hard to compare. To test how VfM metrics could better support savers, BIT ran an online randomised controlled trial (RCT) with 5,005 UK pension savers (aged25–55).

Participants were randomly assigned to one of five arms, each testing a different VfM
presentation format (see right). They were then asked to shortlist three pensions from eight unbranded options, each designed with realistic trade-offs across the different dimensions of value.

This design allowed us to isolate the behavioural  impact of each metric on decision
quality—specifically, whether savers could identify higher-quality pensions more reliably.

There is a lot of analysis that follows but will anyone really judge People’s Pension against Lifestyle using one of the systems of comparison?

I don’t think this is what Patrick Heath-Lay sees as simple .

What is needed in understanding a pension scheme is how well people are doing and what “well” means. The 7 years since 2018 that AgeWage has been doing this work suggests that what employers and their staff want to know is how money has done since investment till the present day.

People do not live their lives through their pension scheme though failures in administration can ruin lives for short periods. Apps are for show but when it comes down to – “it’s the dough”.

I agree with Patrick that value for money is important and will get more so. Australia tells us that the more money we have in the pot, the more we care about how it grows and the worse we think when we can’t get any information.

The FCA accept that the first attempts at disseminating VFM information have not worked and that there is need for something simpler and more effective. We think a poll of the nation is a good thing, do people think they are getting VFM from their pension saving?

This was our first ever poll – not a bad one.