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Advisers slam BBC Panorama pension probe

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IFAs and contributors to Panorma’s programme on pensions have hit out at the way the issue was presented.

Who’s Taken My Pension, broadcast on BBC1 last night, took three pension funds and calculated that over 40 years someone contributing £200 a month would pay between £82,500 and £99,900 in fees. It highlighted that the fees represent between 60 and 80 per cent of the money contributed.

ABI acting director general Maggie Craig was interviewed for the programme and says the calculations are flawed and misleading.

She says: “What consumers are interested in is how much the money they have put into their pension has grown by. It is incorrect and irresponsible of Panorama to look at the amount taken out in fees in isolation to how well the fund has performed.”

She adds: “How much you end up paying depends on how well your pension is doing. If it is not performing well, you will pay less in fees.”

Craig also says the programme’s use of 1.5 per cent as the average charge was incorrect as most charges were between 0.5 and 1 per cent.

Hargreaves Lansdown’s head of pensions research Tom McPhail (pictured) was one of the programme’s pension experts but says that information he provided was taken out of context.

He adds: “Simply presenting that snapshot [of charges] in isolation failed to tell the whole picture. It would have done the viewers a service to offer some more positive messages alongside the understandable criticisms about charges so they could take that way and do something with it.”

Informed Choice managing director Martin Bamford says the programme was sensationalist, but he hopes it will act as a wake up call to investors.

He says: “They were obviously highlighting some of the worst case scenarios and some of the providers and funds were ones that as an investor you would not want to be in.”

He added: “The subject was not as well covered as it could have been but if the end result is to send people off to seek professional advice and take more of an interest then it is probably a good outcome.”

Worldwide Financial Planning IFA Nick McBreen said his firm has been warning about “lousy” pension contracts for 10 years. He says: “They should have had statistics for how much capital is still tied up in these toxic funds.”

McBreen says people are being seduced into thinking their funds will be invested without charges being paid.

He says: “Charges should be fair but having no charges means no reward for people doing the job. There is no free lunch and however much consumer watchdogs keep telling us there is, there is not. The charges can pale into insignificance when you are getting the correct return on the fund and it matches the client’s expectations.”

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Readers' comments (79)

  • Ha ha for Hargreaves as they are often spin the stories to suit their needs

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  • Ironic that the BBC - funded by the most iniquitous tax imaginable - does a hatchet job on an industry they know nothing about on the basis of charges.

    Unlike a pension contract, we all have to pay the BBC their tax and the presenters of the programme directly benefit from the zero competition and protected bubble the BBC operate in.

    Oh, and it was nonsense and factually inaccurate.

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  • What about the BBC's fat pension scheme which we have to pay for via license fees. Also they recently had had outrageous improvement to their final salary scheme all paid for via license fees. What about the poor old ladies who can't afford their license fees whilst the beeb senior staff are awarded pensions worth millions. The BBC is a disgusting orgnisation and we should all stop paying our licenses.

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  • Perhaps we should do a programme on the BBC. We could outline that the licence fees we pay for are made up of 80% of complete rubbish programmes.
    There should be major complaints being forwarded to the BBC.
    Perhaps us IFAs should bombard them with letters of complaint>

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  • Sometimes a negative presentation can have positive outcomes - if this puts people of pensions then they will have to find other ways of planning for their retirement and as the above states should lead to people seeking independent advice.

    Putting all your eggs in one basket - eg a pension - has never been a great idea anyway - common sense says that a variety of vehicles should be considered for retirement planning, ISA's, property, other investments, national savings products etc, in this way the individual is using different asset types to try and build up a fund. If this helps achieve this then it will be a good thing!

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  • Whilst I support that anything that focuses the mind on pensions must be good, the programme was hopelessly poorly presented to the degree that its sole objective appeared to be destroy any remaining consumer confidence in the industry. There was no final collective message of action either.

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  • I felt it was a particularly crass and sensationalist piece of petty financial journalism. The only end result being to encourage the public to be even more cynical than they are now, about pensions and the financial services industry.

    Surely, the trend over the past 10 years or so has been for costs to come down on pensions - compared to many of the old style contracts new ones are a lot more cost efficient..

    The implication that a charge of 1% pa was a rip off and expensive was unbelieveable.

    These programme makers seem to believe you have a right to stellar investment returns for absolutely no cost at all.

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  • I didn't see the programme myself, but reading this I do get a sinking feeling. I refer pension business to a specialist, but when I speak to clients in general terms about pensions many refuse to even look at them - mostly due to horror stories and hype. The really sad thing is they're not making anyother type of arrangments, they're just not doing anything. I dread to think what is going to happen when these folks reach retirement age.

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  • Didn't see the programme. Did they look at St James Place's pension contracts and charges at all?

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  • I regretfully missed the programme but it looks as if Panorama have totally lost the plot. Until recently, I tended to agree to a certain extent with views apparantly expressed in the programme but pensions have proved life savers for many of my clients in more ways than one over recent years. Panorama failed to grasp the benefits of a pension such return of fund on death, tax breaks and building up a retirement fund. Also, the programme failed to grasp that you cannot get anything for nothing. Look at the state (excuse the pun) that the State Pension is in, which is obviously not run by specialists and on the cheap. Quite clearly, our services in the financial services industry are neither valued or appreciated yet we will pay £5million per annum to a football player, what pension are they going to provide?

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