UK - A typical member in a defined contribution (DC) pension scheme could be missing out on as much as £3,600 a year, suggests new analysis.
Fidelity International said that as many as 90% of DC pension scheme members have chosen to invest their contributions in a default fund, but this meant they could be missing out on funds that have the potential to provide better investment growth and therefore a higher income in retirement.
The company said that an analysis of the performance of differently structured investment portfolios suggested that a 30 year old, who contributed £300 a month until age 65 into a balanced fund could obtain an annual income in retirement of £25,816.
However, investors who selected funds aimed at higher investment growth, such as a portfolio of 30% bonds and 70% equities could turn the same level of contributions into a retirement income of £29,421.
Julian Webb, executive director of DC business development at Fidelity International, said: “For those who have the appetite and capacity to take on more investment risk early in life, but fail to do so, poor fund selection could make the difference between an attractive retirement income and a disappointing one.”
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.