Advisers slam BBC Panorama pension probe
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.”