If you have a pension (and most certainly you should), then have you ever reviewed it?
An alarming statistic showed that nearly three-quarters of pension savers under the age of 45 don’t even know the value of their investments.
Of course not all investments are the same. Even a seemingly small difference in performance could have a significant impact on the size of your pension pot.
Say, for example, a 35-year-old with a £20,000 pension pot saw their investments grow by 2% a year. They could have a fund worth £26,871 at the age of 65.
If their investment grew by 5% then that fund would be worth £64,115 at 65.
And if their investment grew by 8% (assuming in all cases an annual fund management fee of 1%) then at the age of 65 that fund would be worth £149,277.
Of course the above are just projections – and it has to be remembered that investments do not always go up in value. They can also go down, so you could get back less than you invested.
Also, these values are in today’s terms, without considering inflation, which will reduce the spending power of your money over time.