Best and worst workplace pension providers: LifeSight, Aon Master Trust, Fidelity, Aviva and more

With new data unveiling a huge performance gap between the best and worst pensions, Katy Ward reveals the best funds for older and younger workers.

If you’re saving into a workplace pension, you probably assume you're onto a winner.

And you could be right…

The best-performing funds for younger workers returned £6,647 on £10,000 after five years, new research into the UK's 20 most popular funds has found.

Meanwhile, the best-growing investments for older workers can bag 16.56% in the year before retirement.

Savings gap

Data from Corporate Adviser shared with This is Money reveals a huge discrepancy between the UK's best and worst workplace pension funds.

If you were in one of the worst-performing workplace funds listed in the rankings, you’d have just £11,660.

According to the figures, the best workplace pension funds have delivered a 66.5% return over five years, while the worst achieved 17%.

Huge numbers of investors

Approximately 16 million employees save into the most popular workplace pension funds.

A further 14 million have savings but are no longer contributing.

Workplace default funds averaged 40% over five years.

Secrets to a successful pre-retirement plan

Letting your fund stagnate

As This is Money points out, pension companies don't create an individual fund for members.

Instead, they have default funds for your money.

This option is particularly common with auto-enrolment schemes if you don't choose a fund when you take out your pension.

According to the data, nine in 10 workers have cash in such default funds.

The best-performing funds for younger workers

The table below shows information for those 30 years away from retirement.

Retirees face 'cruel double whammy'

Source: Corporate Adviser

The most popular funds for older workers

But what about those nearing the end of their careers?

Here are the most popular funds for older workers for the year before retirement.

Source: Corporate Adviser

Key questions to ask

Getting the information you need is vital if you have questions about your pension.

But what should you ask?

Your provider's details: your HR department should be able to tell you the name of your pension scheme and provider.

Also, try looking at your latest pension statement.

Your pension company should send one outlining recent performance every year.

Understand why some funds perform better: according to market trends, high-growth funds invest more in shares.

These have historically delivered more substantial returns over the longer term.

Strategy: if you're unhappy with your fund's performance, you should raise the issue with your pension trustees (or HR department).

They may already be reviewing the fund’s performance or considering changes.

Don't waste your pension pot

What does it mean for my later years?

A couple of percentage points might not sound like a lot, but they can make a massive difference to your retirement income.

Let’s say you start saving into a pension at 21, earning £25,000 a year.

If your pension fund grows by 3% a year, you’d have £194,185 by 68, according to the data from This is Money.

However, if your fund grows by 7% a year, you’d have £697,247.

If your fund is underperforming...

Short-term performance can fluctuate. 

Some funds prioritise steady growth over rapid gains.

However, you need to act if your pension has consistently underperformed.

Otherwise, you could be stuck with a meagre income when you need money most.

Keep an eye on key documents

You can check your annual statement to track performance.

Also, consider increasing your contributions if possible.

In some cases, your employer may match what you pay in.

Watch out for fees

A few years ago, advice firm Profile Financial found that paying higher fees could require you to work for an additional 17 years to reach your pension goal.

You'll likely face charges such as an annual management charge and an underlying fund fee.