The ninth consecutive Irish Times Personal Pension Fund survey shows what happens to an individual's investment in their pension fund and how significantly the value of their fund can vary depending on the performance of the life company with which it is invested and the company's charges.
The results, based on the maturity values of the investments, examine the returns achieved for the investors after product charges. They show a huge £83,837 gap between the value of the best and the worst personal pension plan taken out on January 1st, 1980, which matured on January 1st, 2000.
The survey examined the maturity values of mixed funds - unit-linked managed funds and with-profit funds. These funds contain shares (equities), property, government bonds and cash. It shows that both types of funds have outperformed inflation by more than 12 per cent and 9 per cent per annum over 10 and 20 years respectively.
Inflation, measured by the Consumer Price Index has averaged 2.37 per cent and 2.81 per cent per annum since 1990 and 1985 respectively, while it has averaged 5.5 per cent per annum over the 20 years since 1980.
Where unit-linked funds have remained in shares throughout the investment period they have been able to add another 2.5 per cent on average to the annual return. FDM director Mr Eddie Hobbs pointed out that over the long term this can double the value of the investors retirement capital.
