Personal pensions at 25: 'We failed to make them work for ordinary savers' Billy Burrows of Better Retirement agreed. If you look back over the past 25 years, the truth is there hasn't been much good news on the pensions front. But I am much more optimistic about the future," he said. So, as we pass this key milestone, there has rarely been a better time to take a look at your pension and make sure you are exploiting this tax shelter to the full. Twenty-five years ago almost half the workforce - almost 11 million employees - were in generous workplace pensions paying up to two thirds of their final salary in retirement. Today, this kind of security has all but disappeared for those working in private industry, although it still exists in the public sector. Company pensions today are similar to personal pensions: your retirement income depends on the amount paid in, investment performance and annuity rates in retirement. When employers changed the type of pension offered to employees, they usually also halved the contributions made into these plans. As a result most employees are on target for a pension worth around a third of their salary. The responsibility for improving that outlook now rests squarely with the individual, who must now save more during his working life, or work longer. But this has become harder than ever thanks to tumbling annuity rates. In 1988, they hovered around 15pc. In those days you only had to accumulate a pension of £100,000 over a working life to buy an income of £15,000 a year in retirement. Building that pot was also slightly easier as tax relief was higher and investment markets more robust. Today, the same pensioner would need to save nearly three times that amount - a total of £280,000 - to fund the same pension. Mr Burrows said: "Some people have done incredibly well from personal pensions. But these have largely been the top fifth of the population, mainly higher-rate taxpayers, who have benefited from significant amounts of tax relief and built up very sizeable pots. If I have any regrets about personal pensions, it is that we failed to make them work for the ordinary consumer paying basic-rate tax. The scandals caused a breakdown of trust. I hope we will have more success in the future. That failure has led to two thirds of private sector workers currently saving nothing for their retirement. But Mr Burrows pointed out that company and state pensions were not without their own problems. The state, too, has reneged on former promises, by not paying women a pension at 60 as previously promised. They have also cut back on the state top-up pension. He said some higher earners may now get £175 less a week than they previously expected. A personal pension policyholder who saved £200 a month into an average balanced managed pension fund from 1988 to today would have built up a pension pot of £131,600, which would buy a £7,600 income for life at 65, given today's annuity rates, according to Hargreaves Lansdown. Had annuity rates stayed at 15pc his pension would have been closer to £20,000. However, Legal & General's Adrian Boulding warned against judging lower interest and annuity rates in wholly negative terms. When we had higher annuity rates we also suffered much higher inflation. You got more pension at the point of retirement but its value was quickly eroded by inflation. The best investment sector over the past quarter of a century has been Asia Pacific (excluding Japan). That same £200 monthly premium would today be worth £293,000, providing an £11,800 pension. Japan has been the worst investment. A £200 monthly pension contribution would have grown to just £61,000, buying a pension of just £3,500.