The director of the Pensions Institute, David Blake, has revealed that he believes that pension holders are investing in a lottery!
His criticism focused on default investment choices that are made when investors do not specify where money from their stakeholder pensions should be invested.
Research by the Cass Business School, which Mr Blake co-authored, based on 35 stakeholder pension schemes, has shown that default fund choices included equity content of between 60 and 100%, and that only around half of the schemes included 'lifestyling', which is where the asset mix is slowly changed to cash funds in the last few years, to minimise the risk involved.
According to the report, it is thought that the default fund choice is taken in about eighty per cent of stakeholder pensions.
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