http://bandce.co.uk company pension?

They can't tell you the returns to expect because nobody knows what they will be. The best of the available funds for long term growth looks like the B&CE Global Investments (up to 100% shares) Fund and you can probably expect around 5% plus inflation long term from that, with along the way drops of 20% two or three times a decade and drops of 40% once or twice a decade. the ones with lower shared component would move up and down less at the cost of lower growth, with the 60% shares one likely something in the 4% or so growth and 10-25% drop range.

By default they will putyou into a "balanced" "lifetstyle" profile. The balanced part cuts your growth bu reduces the up and down movements. The lifestyle bit puts your money in low growth investments at ridiculously early times and you should opt out of this immediately or face a substantial drop in your likely eventual pension value.

If you're within 15 years of the retirement age you give them, best to check where they have really put your money, because of the effect of lifestyling that starts around then.

Their adventurous choice isn't really very adventurous. Typical equity investing is closer to what it really is.

ermine wrote: »

......
So you have to roughly get your head around investing for the long-term. As a rough rule of thumb a diversified portfolio of index funds may return about 4% in real terms averaged over decades, you need to target a savings at your desired retirement date of roughly 20-25 times the annual income you want from the pension.

Your 4% figure is possibly conservative.

I am no investment guru but I have some actual historic figures from 3 pension schemes. I use the "XIRR" function on excel which conveniently calculates the net return on the exact date of each exact contribution, and the exact date and amount of final value. My results were:

1. A personal pension in mixed funds started October 1994, with regular (but changing) contributions until January 2000. Then left for a further 7 years without contributions. Crystalised 2007 at 6.55% average annual return.

2. A 'Serps' pension started April 1989, with contributions up to August 1997. Then transferred to SIPP Jan 2015. In a single 'balanced' fund with 85% equities, the rest bonds, property, & fixed interest. Average Annual Return up to transfer was 8.15%.

3. A small stakeholder started February 2000. Regular annual contributions up to now. Average Annual return to end of January 2015 5.32%. The lower figure probably reflects the [deliberately high] 30% of money in extremely safe/cautious funds.

By contrast, a similar analysis of all investments over the period mid 1973 to end Jan 2015 show an annual average return of 7.37%. This excludes my house. Treating the cost of "investment" into my own house, including home improvements, but excluding mortgage interest costs and excluding maintenance etc., shows an equivalent return over the same 40-odd years of 6.70%

Edit: To be absolutely clear, the contributions to the pensions were gross in the above figures and so actual net return after tax can be higher.