Is your old Workplace Pension working for you?

When was the last time you reviewed your workplace pension provision?

For many, workplace pensions feel like a “set it and forget it” type of investment. However, choosing the wrong fund—or leaving your pension in the default option—could cost you significant wealth over the long term.

As recently highlighted in a Financial Times article (linked below), default “lifestyling funds” in some cases are having a detrimental effect on workers retirement savings. While the intent is to protect your savings, this one-size-fits-all approach can backfire.

Lifestyling is a common practice in defined contribution pensions where investments are gradually shifted from equities into bonds and cash as individuals approach retirement. This strategy, historically designed to reduce risk, is now backfiring due to poor bond performance.

Why Default Funds May Be Holding You Back

If you’re over a decade from retirement, default funds can severely limit your potential for long-term wealth creation. These funds often prioritise safety over growth, which could mean sacrificing years of compounded returns.

This is particularly important for expats, who may have workplace pensions scattered across multiple employers and countries. Without careful oversight, your pension savings could be underperforming or sitting in outdated funds that no longer align with your financial goals.

Take Control of Your Retirement Savings

By simply ticking the default box, you might be leaving significant wealth on the table. For some, this could mean the difference between retiring on your desired timeline or working longer and compromising on those bucket list dreams.

Here are some ideas to review if you are on track to meet your retirement goals:

1. Review your funds regularly: Understand where your pension is invested and whether it aligns with your risk tolerance and time horizon.

2. Consolidate old pensions: Consider bringing together pensions from previous employers to make them easier to manage.

3. Seek expert advice: A financial planner can help you optimise your pension strategy, especially if you have complex, international pension arrangements.

Your pension is one of the most important components of your financial future. Treat it with the attention it deserves. Whether you’re an expat in Qatar or transitioning between roles, take the time to review your pension and make informed decisions.

Financial Times article: https://on.ft.com/3u6UDam