Pension returns 2011

As with most investments for retirement you have to take a long term view but it is good to see that UK pension funds posted better returns for the third consecutive year.  According to figures from BNY Mellon Asset Servicing, the average UK pension fund achieved a weighted average return of 4.3 per cent in 2011 making it the third year that UK pension funds have posted a positive annual return since the financial crisis in 2008, which saw funds provide an annual weighted average loss of 13.6 per cent. 

“During 2011 pension funds experienced a wide range of individual results, depending on the extent to which they were following liability-driven investment strategies. The top performing funds achieved returns above 12.4 per cent and the bottom performing funds achieved losses of 4.2 per cent.” said their performance and risk analytics manager.

The data also showed that in the past decade UK pension funds have shifted investments from equities to fixed income, although equities still remain the largest single component for portfolios.
During the year investment in bonds did not see any significant overall changes, but in a 10-year period holdings in this sector have increased by 10.1 per cent, according to the data.

Enable IFA’s of Bishop’s Stortford are pleased to be seeing more and more positive returns for clients but we always stress that simply having the tax relief on pension contributions still makes pensions a good saving tool.