Pension fund savers switching out of their default funds and making their own investment decisions could face a cut in their final pot value of up to £247,000, research has found.
According to a report from The People's Pension and State Street Global Advisors (SSGA), inexperienced savers choosing their own funds could lose out on more than 50% of their possible pot. The report, Workplace Defaults: Better Member Outcomes, looks at how several behavioural biases could impact someone's pot over the course of 33 years, compared to a saver who remains in a well-run default and amasses a pot of £430,000 over the same period. One hypothetical saver, "Cautious Colin", is risk-averse and invests in a cash fund, missing out on nearly £247,000. Meanwhile, "Performance Ch...
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