The relationship between costs charged by fund management companies are eroding your retirement savings returns and how the growth is reported to you as an investor are not necessarily a true reflection of the real returns you are receiving.

Pension Fund and investments designed to give you an income in your retirement are by their very nature low risk and are in fact governed by a strict set of rules designed to protect by investment. The fact that pension funds have returned on average a little over 5% return leaves little room for costs if there is to be any real return.

In David Cameron’s column on Saturday the startling reality was revealed with some investors actually making little or no returns on their retirement investments. He points out that with an average return of around 5% from all prudentially managed portfolios means that some are performing better and of course some are producing less than 5% and when the costs are taken into account, investors, thinking that their investment is growing substantially, are actually losing up to 75% of the retirement investment growth to costs.

He also points out that growth is often shown to investors with the inflationary growth aspect as real growth, this is not necessarily misleading but should be taken into account by investors when evaluating their returns. The long and the short of it is if your fund is showing a return of 5% and the costs charged are in excess of 3% you are making absolutely nothing. Get some free investment advice by contacting us, consider the impact of costs on your retirement portfolio.

An interesting figure to consider   is that at the lowest end of the cost scale on a portfolio performing at the average with a mere 1% in costs means that as much as 20% of your returns are being eroded by costs. It is absolutely essential that you are aware firstly of the real return on your money, the full cost breakdown of the portfolio management company and the effect it is having on your retirement savings.

There are many low cost, low risk options that could be preserving your capital and offering you real returns on your savings that are far above your current returns. Complete the form and we will give you Free advice regarding your retirement savings and the returns available to you.