Pension fund returns 'worst in five years'
Wednesday, 16 January 2008 12:00
2007 saw the lowest returns for pension funds in five years, according to new research.
The average pension fund recorded growth of 5.41 per cent in 2007, compared with 9.17 per cent in 2006, data from Moneyfacts reveal.
Last year's growth is also well down on returns recorded in 2005 of 19.9 per cent.
The 5.41 per cent loss was the lowest since the 15.23 per cent deficiency recorded at the depths of the bear market in 2002.
"After enjoying four successive years of strong investment returns, most pension holders will have seen only modest gains to their policies during 2007," said Richard Eagling, editor of investment, life and pensions at Moneyfacts.
"Only those pension savers who hold more aggressive funds investing in the Far East and Global emerging markets will look back at the last 12 months with any real sense of achievement."
The research also highlighted a number of pension funds posting losses over 2007 - in particular property funds down an average of 13.6 per cent and Japanese funds down 11.4 per cent.
Furthermore 134 funds out of the 27 pension sectors recorded lower growth than keeping cash in a notice savings account.
The pension fund sectors recording the highest growth last year - and in all but one case higher than 2006 - were: Far East excluding Japan (up 36.81 per cent), global emerging markets (up 35.55 per cent), Far East including Japan (up 16.33 per cent), European excluding UK (up 13.53), and global equities (up 10.60).
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