Has your pension a leak and is losing a flood of money?
IF your water tank sprang a leak, would you ignore it? Of course not. You would turn off your water main right away, and get a plumber to fix it.
Well, speaking as your financial plumber, I'm here to tell you there's a good chance that your pension has a leak, and is losing a flood of money that you could so easily keep – if you act now.
There are two pieces of great news this week about your personal or workplace pension, but before we get to them, we have to deal with one piece of not so great news.
According to the latest funds performance report by the financial researcher BestInvest, many UK pension savers are losing money hand over fist – simply because they don't take the time to get it fixed.
This is because nationally, we have a total of £49.6 billion held in 119 funds which have been failing to meet their performance targets by over five per cent for the past three years.
And it's getting worse, not better. That's an increase of a third on the comparable figures from a year ago.
For most of us, our pension savings are invested in a wide range of asset classes, of which investment funds play a large part. If your money has been placed in one or more of those 119 under-performers, it is growing a lot more slowly than it could be – which means that your pension when you retire will probably be a lot less than it could have been.
We're not talking about smaller fund managers, either, or those that have just had a bad year.
The list featured 15 of the nation's ‘mega-funds', each holding over £1bn of investors' savings. Quite worrying, when you think about it.
The well-known company topping the list with the worst overall performance has this year taken that dreaded title for the sixth year in a row, and the others in second and third place are also household names.
Given that so few savers ever ask for a health-check on their pensions, many people's savings may have been invested in those funds, missing out on top growth, for all of those six years!
BestInvest point out that stock market returns in general have been good in the last 10 years, so that some funds that apparently had decent performance have in fact just been bobbing along on the wave of good markets, not buoyed up by inspired decision-making by fund managers.
Which in turn means that you, as a saver, may have been paying fees to managers whose decisions have not contributed very much to any growth you had.
As financial advisers we can spot that, and sift out not just the better funds, but the better fund managers as well.
Phew. Now we get to the good news.
Not only does BestInvest reveal the worst performers in the funds sector, they also name the best ones, and the companies that manage them.
The second piece of good news is that we can switch your money out of any sluggish under-performers, and move it into one or more of the top performers. This will boost the growth in your savings, and turbo-charge your ‘financial engine' so that it's running as sweetly as it can, to provide you with the best retirement you can have.
Given that the difference between the best and the worst funds can be enormous, asking for a health-check on your pension, and where your savings been invested, could mean you have thousands more to retire on.
Would you like to know how your money is doing today? Let us check and we'll tell you!
:: Michael Kennedy is an independent financial adviser and pensions specialist and can be contacted on 028 71886005. Further information on Facebook at Kennedy Independent Financial Advice Ltd or at www.mkennedyfinancial.com