Nearly nine in 10 higher-risk pension funds have failed to match the performance of the FTSE 100 over the past five years, according to new analysis that raises fresh concerns about retirement outcomes for millions of savers.
Research by Investing Insiders examined almost 13,000 personal and workplace pension funds holding more than £1tn in assets between December 31, 2020 and December 31, 2025. Funds in the medium-high and high-risk categories were benchmarked against the FTSE 100 over the same period.
The FTSE 100 delivered cumulative returns of 84.67 per cent over five years, turning £20,000 into £36,934 and £50,000 into £92,335.
By contrast, 89 per cent of pension funds in the higher-risk categories underperformed that benchmark. Of 7,370 funds analysed at these risk levels, 6,540 failed to keep pace with the index.
The worst-performing fund in the study, Zurich Assurance’s Zurich JPM Emerging Europe Equity Pn ZP GTR in GB, lost 98.59 per cent of its value over five years. A £50,000 investment in that fund would now be worth just £705 — more than £91,000 less than if the same sum had tracked the FTSE 100.
Other underperformers included funds linked to the collapsed Woodford Equity Income strategy and several UK property-focused vehicles, many of which suffered heavy losses during periods of market stress.
All of the 10 worst-performing funds were categorised as high risk, and 87.6 per cent of the 1,418 funds in that bracket failed to beat the benchmark.
In contrast, the best-performing fund in the study — Aviva Life & Pensions UK’s Aviva Pen Ninety One Global Gold Pn S6 GTR in GB — delivered returns of 180.28 per cent over five years, growing £50,000 to £140,140.
Investing Insiders estimates that the gap between the best and worst performers could equate to a difference of £139,000 on a £50,000 contribution over the same period.
Antonia Medlicott, founder of Investing Insiders, described the findings as alarming. “Some funds in the same risk category are almost tripling investments, while others are wiping out value,” she said. “Savers often assume their pensions are steadily progressing, but performance can vary dramatically.”
She argued that greater transparency is needed from providers, particularly when funds underperform benchmarks for sustained periods. She also urged individuals to take a more active role in reviewing their pension allocations.
While the FTSE 100 is a widely recognised benchmark, pension portfolios are typically diversified across global equities, bonds and alternative assets. As such, some fund managers argue that direct comparison with a single UK index may not fully reflect investment strategy.
Nevertheless, the scale of underperformance highlighted in the report underscores the impact of asset allocation, fund selection and risk profile on long-term retirement savings.
With retirement outcomes increasingly dependent on defined-contribution schemes, the findings add weight to calls for better default fund design and clearer communication to help savers avoid significant shortfalls in later life.
