A regulatory review found poor value in millions of older pensions — why it pays to check yours

What the review found

A regulatory review covering approximately 17 million unit-linked non-workplace pension and savings contracts — worth around £500 billion in aggregate — found that customers in older, legacy products are typically receiving worse outcomes than those in newer arrangements. The causes identified were consistent: older product design, multiple layers of charges accumulated over time, and gaps in the data providers hold on their own customers’ outcomes.

What “poor value” looks like in a legacy pension

In practical terms, poor value in an older pension often shows up in a few specific ways. Charges that were set years ago — sometimes across several layers (provider, platform, fund) — may not reflect what is now available in the market. The underlying funds may have been restructured or replaced, and older policy terms may offer fewer choices about how income is eventually taken.

None of this is necessarily intentional. Older products were designed under different market conditions and regulatory frameworks. But if those products have not been updated, the customer may be paying more and getting less than someone who opened an equivalent policy more recently.

The review found that some providers are already taking action — capping charges, moving customers to better-value products, or improving their data on outcomes. But not all providers have acted yet, and the process is likely to take time across an industry of this scale.

A simple check you can do now

If you cannot answer those questions from your last pension statement, that itself suggests a review would be worthwhile. Your pension provider is required to supply this information on request, and independent financial advisers can help assess whether what you have is still appropriate.

Pension value and the wider retirement picture

For many people in or approaching retirement, a pension is one element of a broader income picture that also includes the State Pension, savings, and — often the largest single asset — their home. If a pension is delivering less value than it should, that does not necessarily mean retirement income is at risk; it may mean that other sources of income, including property wealth, carry more weight than expected.

Understanding how much your pension is likely to provide, net of charges, is a useful starting point for thinking about the role your home might play in retirement — whether that means downsizing, exploring a lifetime mortgage, or simply knowing the equity is there if needed.