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We reveal the worst pension funds

We reveal the worst pension funds

Bestinvest has campaigned to raise awareness of poor fund performance for over two decades through our landmark Spot the Dog guide. We have now turned our attention on the UK pensions industry with the publication of a damning new report: Spot the Dog Pension Edition.

Spot the Dog Pension Edition has identified 113 pension funds, with combined assets totalling approximately £31 billion, that have consistently underperformed. To earn a place in the report funds must have failed to beat their benchmark* over three consecutive 12-month periods in succession and also by more than 10% over three years.

The report also names a set of 40 funds in four major Association of British Insurers pension fund sectors that we have dubbed the “Long-Term Laggards”. These have undershot the average fund in each sector by more than 20% or more over the last decade. Many of the dullards highlighted are “legacy” pension funds, acquired by pension fund consolidator firms who have taken-on assets from former life and pension providers that have closed to new business.

The filters we have applied are designed to highlight the “worst of the worst” and there are many more funds out there delivering pedestrian returns, so the new report merely represents the tip of the iceberg.

The performance of your pension funds really does matter as the price of tolerating poor performance will quite literally be a worse off lifestyle in your retirement. Spot the Dog Pension Edition is a wake-up call: your pension is too important to ignore and you do not have to put up with dire performance.

The value of your investment can go down as well as up, and you can get back less than you originally invested.

The Bestinvest Online Investment Service, including any account analysis and investment reports provided by our guidance services, is an online execution-only dealing service for investors who want to make their own investment decisions. It does not provide advice on the suitability of products and investments; if you are unsure about the suitability of any investment you should seek professional advice. Clients of our Investment Advisory Service and Managed Portfolio Service can use the website to obtain current valuations of their investments but cannot trade on these accounts online and should call their adviser if they wish to discuss changes to their investments.

Past performance or any yields quoted should not be considered reliable indicators of future returns. Restricted advice can be provided as part of other services offered by Bestinvest, upon request and on a fee basis. Before investing in funds please check the specific risk factors on the key features document or refer to our risk warning notice as some funds can be high risk or complex; they may also have risks relating to the geographical area, industry sector and/or underlying assets in which they invest. Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.

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© Tilney Bestinvest Group Ltd 2016.

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