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Britain’s pension funds are seriously underperforming, with savers receiving far less income in retirement as a result. Stockbroker AJ Bell reveals that nine in ten UK pension funds have failed to keep pace with funds that simply track the UK stock market, as measured by the FTSE All-Share index, over the past decade. Almost three-quarters have underperformed by more than 10% and more than a third are at least 20% behind. 

Well-known pension providers singled out for criticism include Clerical Medical, Phoenix, Scottish Widows and Standard Life. Even small differences in performance have a substantial impact over time, AJ Bell warns. A saver with a £50,000 pension fund would see their savings grow to £167,357 over the next 20 years if their fund returned 6% a year; if that return dropped to 4%, the final pot would be worth only £109,556.

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