The Office for Fair Trading has warned that billions of pounds of savers' money is at risk of delivering poor value for money.
The OFT has made a string of recommendations to shake up the pensions market to make sure millions of new savers get value for money.
Six high street carpet and furniture shops are under investigation for allegedly using artificially high prices to exaggerate price cuts.
A sports bra-maker and three major department stores are being investigated by the trading watchdog over allegations they illegally agreed to prop up prices.
The claims relate to the Shock Absorber bra, once advertised by tennis star Anna Kournikova with the slogan, "Only the ball should bounce".
The Office of Fair Trading (OFT) alleges that lingerie maker DB Apparel UK entered into anti-competitive agreements with John Lewis, Debenhams and House of Fraser between 2008 and 2011.
DB Apparel and Debenhams have denied the allegations, while House of Fraser and John Lewis said they are "cooperating fully" with the OFT's investigation and will respond in due course.
Despite how grim things might seem, it is not a good idea to just pull out of a scheme - not without very careful advice.
It is normally better to save than not to save especially since bosses make a contribution.
More specifically today we asked the Office for Fair Trading, "why can't you now supply us with a full list of all those schemes you deem to be potentially bad value?", but they refused.
They say so far they know the type of schemes involved but they are not making that information public on a bigger scale, at least not until they have finished the audit that they are now setting about.
We have no timeframe on that but we will be keeping a careful eye on things.
This welcome report is a clear victory for union and consumer campaigning.
Auto-enrolment is a huge advance as it will lead to many more workers saving for a pension. But they need the best possible protection to ensure that every pound they save provides the best possible income in retirement.
– TUC General Secretary Frances O'Grady
This is why the OFT is absolutely right to crack down on abuses such as high charges and so-called active member discounts - charges that increase when people leave their employer.
We welcome the government's plan to cap charges, but see the rumoured one per cent cap as simply a starting point in a process that sees charges brought down much closer to the 0.5 per cent level already achieved by some providers.
But defined contribution (DC) pensions must not just be low cost, they need expert governance that runs schemes purely in the interests of their members.
The Office for Fair Trading has made its concerns about the pensions industry plain today.
One of the fears they have is the variation in the amount savers get charged.
We asked the number crunchers at financial experts Hargreaves Landsdown to illustrate the changes.
And as the figures below suggest, savers could be nearly £20,000 worse off if they're signed up to one of the more expensive pension schemes.
On an average salary, saving over twenty years with a five per cent return and wages growing at two percent in real terms:
- A saver in a pension scheme that charges 0.5% would end up with a pot of £96,360
- A saver in a scheme that charges one per cent would end up with £86,480
- A saver in a scheme that charges 2.3% would end up with just £75,370
– Minister for Pensions Steve Webb
This report outlines further important ways to help consumers, and we will act on its recommendations.
In particular, we need to ensure those already in pension schemes are getting good value for money, and will be actively involved in the audit of pension schemes sold prior to 2001.
We will consult shortly on the full range of options to protect consumers, including minimum scheme standards, and further action on charges and charge transparency.
– Joanne Segars, National Association of Pension Funds
We are particularly concerned that the report risks letting down pension savers who need someone solely on their side, with the independence and power to act in their interests, to make sure they get the best outcomes for their retirement savings.
We would have preferred a clear direction that employers have a choice – they should either be prepared to provide governance themselves or use a master trust arrangement.
The proposal to have governance as part of the provider risks fudging the issue and leading to potential conflicts of interest.
The trading watchdog said the Government should consult on improving the transparency and comparability of pension schemes to make it easier for employers to choose a scheme for their workers.
The Office of Fair Trading made a string of recommendations to shake up the pensions market to make sure that millions of new savers do not sink their money into rip-off schemes.
It carried out a study into the £275 billion defined contribution (DC) workplace pensions market, to look at whether such schemes offer value for money, if there is enough pressure on providers to keep their charges low and what size of pension pot savers are likely to end up with at retirement.