5 radical steps to stop the great pensions rip-off By James Coney Today, Money Mail launches a major campaign to help millions of savers get the best possible pension. At the moment, too many retirees are missing out on thousands of pounds of income to which they are entitled because of the baffling way the system works. We have had many tiny changes to the rules over the past few years, but these have never been enough. It is time to rethink pensions. We need a system that guarantees that everyone who works has the chance to build up the biggest pension pot possible, and gets the best pension payout they can. Time to rethink pensions: The campaign is calling on policy-makers, regulators and insurers to take steps to end a system that is stripping thousands from those who most need the money We need to make it easier for savers to take responsibility for getting the most from their nest eggs - and not leave the frail and the unaware to be preyed on by unscrupulous firms which routinely offer the worst deal. We need to ensure that people are able to use their pensions in a way that best suits their retirement; that they aren't handcuffed by daft rules and antiquated regulation. Today, this is more critical than ever, with around 11million people being automatically enrolled into a pension for the first time due to a new Government policy, and other savers forced out of gold-plated final salary schemes. Huge numbers of people are going to have to take control of their savings - and it means much more must be done to help them get the best deal. Our Better Pensions campaign is calling on policy-makers, regulators and insurers to take steps to end a system that is stripping thousands from those who most need the money. We believe five radical steps could help ensure that savers get every chance to build up as big a pension as possible. 1: Tougher rules When it comes to turning your pension into an income, insurers have been allowed to write their own code of conduct. Last year, Money Mail exposed loopholes in these rules that allowed insurers to get away with offering shoddy deals to customers. Some companies do treat savers fairly - but they are being let down by the big names that don't. The purpose of these rules was to make sure more people shopped around for the best pension payout - yet thousands still seem to be missing out. The City regulator, the Financial Conduct Authority, is currently investigating what happens when people take an income from their pension. After its initial findings, which are due in February, we need a thorough independent review - and then tough formal rules that firms cannot disregard. Rip-off payouts: Insurers should be barred from sending you a quote for an income in retirement unless you have asked for one 2: Pension Passport Retirees should be asked to complete a "pension passport" by their insurer - a standard form that would include all the details they need to know in order to turn their savings pot into an income. The information would be stored in a central database that all insurers can access, so you could go to any insurer, broker or financial adviser, give them your passport details and get a quote. Crucially, until you filled out the passport form, you wouldn't be able to get an income from your pension. People complete application forms for jobs, insurance and all kinds of financial products: there is no reason why they wouldn't do so to get their pension. It puts all power and responsibility in the hands of the consumer. 3: No more rip-off payouts At the moment, the company you save with is allowed to send you a quote for your pension. This often bears no relation to your personal circumstances, and can often be a terrible deal. But many savers don't know this - and blindly accept the quote. As a result, they can miss out on thousands of pounds in income. Insurers should be barred from sending you a quote for an income in retirement unless you have asked for one and have given them your pension passport details. This will stop people inadvertently signing up to poor deals that lose them a small fortune. 4: Simpler deals The names of different types of pension are baffling to outsiders. Escalating, flat, fixed-term, joint-life, investment-linked - all these words are practically meaningless unless you work in finance. It is great that there is so much choice, and this should remain. But insurers should drop the jargon and just quote simple terms. We will be making suggestions of how we think this will work in the coming weeks. On top of this, we need to simplify the rules. Huge numbers of people have small pension pots of less than £10,000 - and are forced to turn them into an income. This would give you just £43 a month. Instead, these people should be allowed to take the money in cash. Similarly, a type of pension that allows people to use their nest egg like a cash machine, called drawdown, is tied up in tricky rules. When the new state pension is introduced in 2016, these rules will no longer be relevant, so should be scrapped, making drawdown more available. 5: A free financial health check Most workers paying into a pension simply forget about it. It can come as a nasty surprise to find out that when they retire, the amount of cash they have is significantly less than they'd thought. We need more action on talking to savers through their lifetime - then, for example, 30-year-olds would have a picture of how much they will have in retirement, and get the chance to put aside more to build up a bigger pot. A critical part of this would be a free financial health check for all 50-year-olds. A group of financial advisers - who are not salesmen - would sit down with the person and run through their savings. It's the sort of set-up that already exists at some firms which run schemes for big firms. We need to get those approaching retirement to think: "This is my pot of money - now, what am I going to do with it?" The financial health check - which would be funded by insurers - would give workers a final chance to get their savings on track. Annual pension statements also need improving. Savers need to know how well the pension has performed, how much they have contributed, and, in pounds and pence, how much they have paid in charges.