You can't take it with you

Would you buy from this salesman? His patter goes, "You bung me a regular, large chunk of your earnings. I'll keep it - neither you nor your dependants can ever have it back. In return, you can have some income after you stop working but I'm not going to tell you how much until the day you retire - just trust me. Oh, and I don't expect you to interfere and I shan't be telling you much about my fees". That is the sales proposition of the personal pensions industry. More and more people, many of them self-employed and small business proprietors, are finding it unacceptable.

Pressure is growing for root and branch reform of pensions legislation. State schemes are in trouble all over Europe, including the UK. Recent scandals in company-owned schemes have damaged public confidence. Some big personal pensions providers have been unmasked as complacent and out of date, and the worst as unscrupulous profiteers. Even in well-run schemes, income for pensioners is uncertain. New heavyweight financial services providers, big banks for example, are buying their way into the field.

Proprietors of small businesses have often looked in envy at the pensions provided by the larger employers. These 'occupational' schemes can form part of the employees' or directors' contracts of employment and, if the company is doing well, can offer highly attractive perks in the form of pensions tied to final salary or subsidised contributions. Currently about half the workforce has an occupational pension scheme but this is set to fall as job mobility increases. The National Association of Pensions Funds' Chairman, Alan Pickering has warned that the arrival of new stakeholder pensions may further reduce their attractiveness. There are also growing fears that some of the largest companies don't have the funds to pay for the pension commitments they have made...

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