Pension Performance
Pension performance can mean the difference between a comfortable retirement income and financial difficulty in later years. Keeping an eye on pension performance is particularly important if you pay into a money purchase or personal pension scheme.
Usually you will pay money into a pension scheme and that money is subsequently invested either by you or by someone else, depending on the terms of your scheme.
How does pension performance impact my pension fund?
If you are a part of a defined benefit occupational pension scheme, your pension contributions will be invested on your behalf and any shortfall on returns will need to be covered by your employer. This effectively means that defined benefit occupational pensions are mostly protected against poor pension investment performance.
However, if you are a part of a money purchase or personal pension scheme then the size of your final pension pot will usually depend on the performance of your pension investments.
What type of pension scheme does this include?
Money purchase and personal pension scheme options include:
- Certain types of occupational pension.
- Stakeholder pensions.
- Personal pensions.
- Self Invested Personal Pensions (SIPPs).
The type of pension scheme and pension investment that suits you best will depend on your attitude to risk and the returns that you hope to make.
For impartial advice on pension performance, or to discuss how you could get the best out of your pension fund speak to a membe of an independent pension advice team and receive a free initial consultation.
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