Private pension funds investors have received about 15% lesser retirement income as they were not clearly told about an option to shop on their pension, the BBC News has reported quoting Ros Altmann, a former government pensions adviser, and some other experts.
Investors, who put their money in a private pension fund, have an option to shop around with the fund to get a better return. They need not necessarily take the income from the same company in which they have invested.
However, the Financial Services Authority has found that a number of companies have not properly explained the shopping option to their investors. From the letters it received from 55 pension companies, the authority has found that 40% of them did not meet the rules.
The BBC News has quoted Ms Altmann as saying that the government has not taken action in spite of knowing about the issue in 2000. She said: The government has just ignored the problem and allowed the insurance industry to continue with its practices which are opaque, which people just don’t understand.