According to recent research by Bestinvest there are no less than 113 'dog' pension funds (over £2.5 million in size) that are serial underachievers. The total amount invested in them is £31 billion! Their underachievement is likely to have a serious impact on their owners' retirement plans. Whilst I have some sympathy, everyone should have realised by now that financial planning is a process and not an event, so you need to regularly review your pension funds and the amount that you're putting aside each month/year or you could find yourself 'enjoying' a retirement on the breadline.
To give an example, even 3% underperformance each year can make a huge difference. A simple example may help. Let's say you put £20,000 into a pension today anticipating your retirement in 25 years' time and that you have an adventurous attitude towards risk. You might expect to achieve a 9% per annum return on your money which (ignoring charges for the sake of simplicity) would result in a fund of £215,570 when you retire. If you had picked one of the dogs, however, your pension fund would only have grown to £107,297, so you'd receive LESS THAN HALF the pension you might reasonably have hoped for!!
Do you have any dogs in your pension investments? Unless they are professionally reviewed on an annual basis it's highly likely that you do, so get them checked out now.
