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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.

David Smith
18 October 2013

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 investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. Past performance is not necessarily an indication of future performance. Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.

We aim to provide investors with information to help them make their own investment decisions although this should not be construed as advice or an investment recommendation. If you are unsure about the suitability of an investment or if you need advice on your specific requirements, we strongly suggest that you consider professional financial advice.