What Value for Money (VfM) means Today

Many thanks to VfM Podcast, Darren Philp, and Nico Aspinall for the opportunity to discuss the weeks’ pensions news and what Value for Money (VfM) really means in pensions. I’m very honoured to have taken part. Time ran short, so I’ve jotted down some points and anecdotes that didn’t make it into the conversation.

How Far We’ve Come

Pensions have evolved significantly over the years, particularly in delivering better Value for Money to members. Looking back, it’s clear that we’ve moved on from an era where high charges, complex rules, and poor consumer outcomes were all too common.

After the famous 50p landed, I found myself in an industry implementing the requirements of the Financial Services Act 1986, where the industry took its first steps towards better governance. It wasn’t perfect, but it was progress. As an IFA in the early 90’s, a clear example of the need for change was client who had to take her FSAVC benefits early due to ill health – only to be hit with a 95% early encashment penalty. Situations like these highlighted the urgent need for fairer, more transparent, VfM, pensions.

Thankfully, today’s pensions landscape looks very different. The introduction of Drawdown, Stakeholder (and charge cap) charges, Auto-Enrolment (AE), and Freedom & Choice has reshaped the value we deliver, offering members greater flexibility, control, and protection. But while we’ve come a long way, the journey doesn’t stop here. Like the Effective System of Governance (ESoG), continuous improvement is key to ensuring better outcomes over time.

VfM: Making a positive difference

At my 50th birthday party an old friend reminded me that, back in the late 80s, I had encouraged him to put £50 a month into a pension. It was a big ask at the time. Fast forward to my party, he considers it the best financial decision he ever made. Without that pension, his later years would have been far less secure. That’s the essence of VfM – it’s about ensuring that pensions deliver meaningful financial independence when it matters most.

As an ex-IFA, I continue to be member focussed in my trustee activities. Delivering Value for Members helps build trust in pensions and our financial framework. Build trust, we improve engagement. Improve engagement, we improve understanding. Improve understanding, we improve outcomes.

Want to Hear More?

If you’re interested in a deeper discussion on these topics, be sure to listen to the VfM Podcast, where we unpack the latest pensions news and explore what Value for Money really means for savers. You can tune in here!