In many cases, the value of policyholders' funds will only be worth a fraction of total payments into the scheme because massive up-front charges have been deducted by insurers.
Those most likely to be affected are people who are made redundant, women who take career breaks to look after children, and those who find work in which they are able to join alternative company schemes.
Research commissioned by The Independent also shows that many hundreds of millions of pounds of taxpayers' money are poured by the Government each year into meeting these high policy charges.
More than pounds 4.5bn of contributions into personal pension funds in 1995- 96 came from tax and National Insurance rebates, almost twice the amount paid in by policyholders themselves, according to figures from the Inland Revenue.
Pension premiums paid by individual policyholders are matched by rebates worth up to 66 per cent of total contributions. Taxpayers are therefore indirectly subsidising the profits made by many companies.
Philip Telford, senior researcher at the Consumers' Association, said: "In these cases what companies are saying by that is `We are making sure that we are making a profit come what may'. The tax relief helps in that process."
Harriet Harman, Labour's social security spokeswoman, said yesterday: "These figures are shocking. They show that people are getting incredibly poor value for their hard-earned savings."
A joint investigation by The Independent and Granada's World in Action programme, to be shown on Monday, reveals that many companies with the highest sales and the best-known brand names are guilty of the same poor standards.
The analysis, carried out by John Chapman, a former Office of Fair Trading official, shows that of 903,000 new policies taken out in 1996, at least 307,000 will have an investment worth less than the total amount paid in premiums over two years. This is an average for the industry, and many firms have much worse records.
The list of high-charging companies includes household names such as Allied Dunbar, Albany Life, Cornhill, Guardian, Scottish Life, Black Horse Financial Services, an offshoot of Lloyds Bank, and Sun Life.
For example, total payments of pounds 2,400 into a pension from Black Horse may only be worth pounds 734 after two years, even assuming investment growth of 9 per cent for each of those years. With one company, Old Mutual, the total is just pounds 376.
The potential losses for tomorrow's pensioners are caused by the extremely high lapse rates on most personal retirement contracts. On average, 25 per cent of policyholders halt payments into schemes they buy from insurance salespeople within two years of starting them. For financial advisers, the figure is 15 per cent. Thereafter, "lapse rates" generally continue at about 6 per cent a year.
It can take up to 10 years with some companies before "break-even", the point at which the pension is worth the same as contributions. The lapse rates allow companies to promise fantastic maturity values on their pensions - though they are paid to a tiny minority of customers.
Mr Chapman's findings come as the insurance industry has come under unprecedented attack over the mis-selling of personal pensions to more than 1.5 million people between 1988 and 1993. Barely 8,000 victims have been compensated. More than double that number have died before receiving redress.
A spokeswoman for the Association of British Insurers, the industry trade body, said: "Pensions are a long-term investment. If someone does not have the intention of making contributions over the longer term, they should not be buying one and they should not be sold one. However, many companies are increasingly offering more competitive pension contracts, which shows that the industry is changing," she added.
Long Weekend, pages 23-26
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