Lowdown on high-risk fund fails
Millions of people across the UK could be losing large sums of money from their pensions as nine out of ten high-risk funds have failed to hit an industry benchmark in the last five years, according to a new report.
Research by Investing Insiders compared the performance between 31 December, 2020 and the same day in 2025 of almost 13,000 personal and workplace pension funds holding more than £1 trillion of investments.
Funds in the higher-risk categories were benchmarked against the FTSE 100 over the same five-year period.
The study said returns on the FTSE 100 increased by 84.67 per cent over the five years to Hogmanay 2025, which would have seen £20,000 inflate to £36,934, and £50,000 to £92,335.
Over this same time period, it found that 89 per cent of pension funds in medium-high and high-risk categories, which are designed for large growth, underperformed compared to this figure.
Investing Insiders warns that this means a huge 6,540 out of 7,370 funds missed the benchmark, leading to millions of Brits missing out on growth they could have achieved in a tracker fund.
The research found that of the worst performing funds, all of the top-ten belong to the high-risk category, with 87.6 per cent out of 1,418 funds at this level failing to hit industry benchmarks.
Zurich Assurance’s Zurich JPM Emerging Europe Equity Pn ZP GTR in GB was the worst performing fund in the study, losing a staggering 98.59 per cent of its value in the last five years. Anyone who had £50,000 in this fund will now have just £705 left of their pension. This is more than £91,000 less than they would have if their money were invested in the FTSE 100 for the same amount of time, according to the study.
In comparison, Aviva Life & Pensions UK has the best performing fund overall, as its High risk Aviva Pen Ninety One Global Gold Pn S6 GTR in GB saw returns of 180.28 per cent. Those with £50,000 in this fund will have seen it increase to £140,140, which is 19,778 per cent more than the worst performer, says Investing Insiders.
The second-worst performing fund was Scottish Friendly Assurance’s Scottish Friendly CL Woodford Equity Income Pn S4 GTR in GB, which lost 91.46 per cent.
Canada Life’s Canlife UK Property Pension GTR in GB lost 85.65 per cent of its value, reducing a £50,000 pension pot by almost £43,000.The OMR Carnegie Rysslandfond GTR in GB fund, managed by ReAssure Life, in fourth place, also lost more than 85 per cent, and Canada Life’s Canlife UK Property Pension GTR in GB rounds off the top-five worst performers, said the report.
Commenting on the analysis, Antonia Medlicott, founder and managing director of Investing Insiders, says: “It’s alarming to see the number of pension funds that are failing to hit benchmarks, leaving the holders thousands out of pocket. Some of the poorest performers are effectively wiping out the future for the holders, whilst being in the same risk category as others, which are almost tripling investments in just five years.
“People will naturally assume their pension will be progressing at a good rate, so more needs to be done to inform people of the volatility of their funds, including providers keeping users up to date when performance drops below certain thresholds.“In general, they need to ensure that default schemes provide better value, or else we will end up having to work longer to achieve their retirement goals.
“Whilst we believe changes should be made to help people, the results from our research highlight that individuals need to take it upon themselves to take more interest in their own pension performance, and the risk level it is set at.“Depending on your age, retirement goals, and where you are in life, the fund you are in can and should change dramatically. To help, we have created a tool that allows Brits to compare their performance and see if they should be happy or alarmed.”
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