If I ask the question where is your pension, you might think that I mean is it something you access on-line, or via your employer or is it found in a folder in a drawer somewhere in your house? But what I actually mean, for those of us who have money invested in a pension fund or funds, is where in the world is that money invested? Is it in the UK, the USA, Europe, the Far East or on a world tour of a whole bunch of places?
If your honest answer is that you have no idea, then our Snapshot pension service can track this down for you, free of charge.
At this stage of the pandemic, we are probably a lot more worried about the fact that we are stuck at home, rather than whether our pension funds are invested at home or abroad. We might also think that it’s the type of companies that are held in our pension funds that matter more than where that company is located – an on-line retailer will be doing better than a high street chain in most countries in the world during lockdown.
However, the 2020 end of year round-ups of the investment markets made it clear that investments in some parts of the world performed a lot better than others. The UK FTSE 100 delivered the lowest returns, finishing the year around 14% lower than when it started, Europe just about stayed level and the best performer, the US, was up 13%.
Now, this absolutely does not mean that you should move all of your pension money into a US fund. The single sentence I have probably typed the most in my 20 years in financial services is “past performance is no guide to future performance”. It is in fact incredible that my dyslexic fingers still tend to muddle up the letters in performance sometimes!
Another well-known investment saying is the quote attributed to Nobel Prize laureate Harry Markowitz, “Diversification is the only free lunch”. This refers to the fact that no single type of investment or geographical area will be the best performer all of the time. In order to achieve long term growth without excessive levels of risk, it is wise to spread your investments widely.
I do not claim to know whether the UK, the US or another market will be the best performer in 2021, but I do know how to check where my own pension funds are invested. I can jump on a website and find out with a few mouse clicks. I haven’t always been this organised, I once ignored a small pension plan for a few years and when I did eventually look to see how it was doing, I found the fund that I had “cherrypicked” had turned into a bit of a rotten apple and performed really badly, despite having very high charges.
Its important to keep tabs on your pension funds to avoid disappointment like that one. Even someone who works in financial services like I do, can be caught out if they take their eye off the ball. Pensions can be daunting and confusing and you shouldn’t hesitate to seek help if you need it. Our Snapshot pension service is pretty rare, having no hidden charges or strings attached, and it could provide you with key information you need to avoid any nasty surprises.
While we are all stuck in our houses, with holidays and travel seeming far out of reach, it’s a great opportunity to check that our pension funds are in the right places.
To get your free of charge pension report with Snapshot Pensions, visit our new request page. The report will analyse the risk, charges and investment performance of your pension. If you have any questions regarding your pension or financial planning you can also contact us via our contact form to arrange a meeting with one of our Cornerstone advisors.