Brits are at risk of missing out on £163,000 due to certain UK workplace pension funds underperforming against standard benchmarks. New analysis by Investing insiders has revealed the worst-performing pension funds which could cost savers hundreds of thousands of pounds when they retire.
A whopping 53.6% of pensions are not performing as well as they could be for workers, the research shows, as they did not beat the benchmark aligned to their fund risk category. This highlighted a £163,000 difference between the worst and best-performing pension fund. The analysis compared the performance of 276 pension funds which are offered by 18 of the UK’s leading workplace pension fund providers.
According to the analysis, the worst-performing investment over five years is Smart Pension’s Smart All Stocks Index-Linked Gilts Index Fund, which would have seen losses of -28.5 % over this period. On a £100,000 pension pot, this loss over the previous years would have reduced their pot to £71,500, which is £163,000 less than the best-performing pension fund.
Smart Pension’s ‘Low’ risk Smart Annuity Fund performed the second worst, with investments falling by -21.8% in this period.
The third worst was the Aegon BlackRock 30/70 Equity and Bond Tracker Pn managed by Aegon/Scottish Equitable. This fund would have seen a -21% on pension returns in five years.
In fourth was Zurich Assurance’s Zurich Managed Bond Pn Capital AP, which had a -19.7% decline in this time.
Aegon/Scottish Equitable pl 70/30 Defensive Managed Collection Pn was the fifth worst performing fund, with a -3.2% return in five years.
At the other end of the scale, the best-performing pension fund was the RLP Global Equity Select Pn fund managed by Royal London, which saw returns for investors of 134.5% over five years. Across this period, a pension pot worth £100,000 would increase its worth to £234,500.
Behind that was Smart Sharia Fund by Smart Pension, which increased by 121.1%, and was just ahead of Aviva’s Aviva Pen HSBC Islamic Global Equity Index Pn S14, which saw 116.8% growth.
Antonia Medlicott, founder and managing director of Investing Insiders, said: “Many people assume that they will have been put into a well-performing fund, and if it’s not doing well, there will be someone, somewhere, who is sorting that out for them. But the reality is often very different, especially in the case of forgotten and old workplace pensions.”
