Is my pension actually performing? A 10-minute check

Once a year the statement arrives. You open it, scroll past the small print, and find the line that matters: “Your pension is now worth £640,000. Up £40,000 on last year.” You feel reassured and close the email.

Now look again. That year you and your employer paid in £20,000. So half of the £40,000 “rise” was your own money going in. The investments themselves made about £20,000: a return of roughly 3.3% on what was in the pot. Whether that is good or bad depends on what it was invested in, what it cost and what similar funds did. The statement doesn’t tell you any of that.

“Most people hand their retirement to someone else and never check the result.”Alpesh B Patel OBE

Wherever you are in the world. This check works for any retirement account: a UK workplace pension or SIPP, a US 401(k) or IRA, Australian super, a Canadian RRSP, an Indian NPS or EPF account, or an international or expat pension plan. The examples are in pounds because most of my readers are British; the maths is the same in dollars, euros, dirhams or rupees. Where rules differ by country, I say so.

Currency guide: £1 is about US$1.34 and about €1.19 (exchange rates on 20 October 2026; they change daily). So the £640,000 pension in this guide is roughly $856,000 or €762,000, and £500,000 is roughly $670,000 or €595,000.

This guide is the check. It takes about ten minutes once you have the paperwork, and it answers three questions: what your pension really returned, what it really costs, and what it is really invested in. Then it helps you decide whether everything is fine, whether to ask some questions, or whether it needs a proper look.

Step 1: Gather four things

You need:

1. Your last two annual statements (or the online account), showing the value at the start and end of the year.
2. How much went in during the year: your contributions, your employer’s and any tax relief added.
3. The name of each fund you are invested in, and its factsheet. Search the fund name plus “factsheet”; it lists the charges, the benchmark and what the fund holds.
4. Every charge: the fund charge, any platform or administration charge, and any ongoing adviser fee.

Lost track of an old pension? In the UK, the government’s free Pension Tracing Service gives you contact details for an old employer’s or provider’s scheme. In the US, the Department of Labor’s Retirement Savings Lost and Found database lists job-based plans linked to your Social Security number. In Australia, lost super shows up in your ATO account through myGov. Elsewhere, contact your former employer or the provider named on your last statement.

Step 2: Work out your real return

The rise in your balance is not your return, because it includes money you paid in. A simple, good-enough way to strip that out:

Using the statement above:

If your provider’s website shows a “performance” or “investment growth” figure, use that instead. Either way, look at three to five years, not just the last one.

Step 3: Compare like with like

A return only means something next to a fair comparison, one that takes similar risk:

• The fund’s own benchmark. It is on the factsheet. A fund that trails its own benchmark for years is not doing what it set out to do.
• Similar funds. A “balanced” fund that holds a mix of shares and bonds should be compared with other mixed funds, not with a fund that is all shares. In the UK, the Investment Association’s Mixed Investment 40–85% Shares sector is a common yardstick; in the US and many other markets, fund research sites group funds into comparable categories.
• A low-cost global tracker, if your pension is mostly in shares. It shows what you could have had with very little cost or effort.

One poor year is not a verdict. Markets move. What matters is a pattern: lagging a fair comparison, after charges, three, four, five years in a row.

Step 4: Add up every charge

Charges come in layers, and each one looks small on its own:

• the fund charge (the “ongoing charges figure” in the UK, the “expense ratio” in the US);
• a platform or administration charge;
• an ongoing adviser fee, if you have one, often taken straight from the pot.

Add them together to get your total yearly cost. In the UK, if you are in the default fund of a workplace auto-enrolment pension, charges are capped by law at 0.75% a year. That cap does not cover funds you have chosen yourself, most personal pensions and SIPPs, or adviser fees. Most other countries have no such cap. International and expat pension plans in particular can stack several layers of charges and long exit penalties, so read the charges section of the documents carefully.

Why it matters: imagine £600,000 left for 20 years, growing at 6% a year before charges. This is an illustration, not a prediction.

A gap of just over one percentage point a year costs more than half of the starting pot. On a larger portfolio, the pounds lost to charges grow just as fast as the pounds you hoped to make. Charges are worth paying when they buy something valuable. The question is whether yours do.

Step 5: Check what you actually own

Open the factsheet’s top holdings and asset split, and ask:

• Does the risk fit how many years you have left? Someone 25 years from retirement in a very cautious fund may be giving up growth they need. Someone close to retirement who is almost all in shares may be taking more risk than they realise.
• Is it quietly “lifestyling”? Many default funds automatically move into bonds and cash as you approach a set retirement age. Check that age is still your plan.
• How much is in cash, and has it been sitting there for years?
• Is it concentrated in one country, often your home market, or in a handful of companies, without you having chosen that? The UK is only a few per cent of world stock markets; the US is more than half. Either way, it should be a choice, not an accident.
• If you have several pensions, do they all hold much the same thing?

Step 6: Your verdict

Before you transfer or consolidate: check what you could lose

A disappointing pension is a reason to look closer, not to move money in a hurry. Never transfer, consolidate or cash in a pension until you know exactly what benefits you would give up. Some of the most valuable features never appear in the performance figures, and once you leave a scheme they are usually gone for good.

Then weigh the other costs of moving:

• The UK advice rule. If you have safeguarded benefits worth more than £30,000, the law requires you to take regulated financial advice before transferring them. The regulator tells advisers to start from the assumption that giving up a defined benefit pension is not in your interests.
• Time out of the market. Transfers can leave money in cash for days or weeks. If markets rise in that time, you miss it.
• Tax and penalties abroad. In the US, taking money out of a 401(k) or IRA before age 59½ usually adds a 10% additional tax on top of income tax, so move money by direct rollover rather than cashing out. Other countries have their own rules on moving or withdrawing.
• Overseas transfers. Moving a UK pension to an overseas scheme (a QROPS) can trigger a 25% overseas transfer charge unless an exclusion applies. Since 30 October 2024 that includes most transfers to schemes in the EEA and Gibraltar, unless you live in the same country as the scheme.
• Scams. Be wary of cold calls, promises of unusually high or “guaranteed” returns, overseas investments you can’t check, or offers to release cash before the minimum pension age. These are classic signs of pension scams.
• Chasing last year’s winner. One of the most common and expensive mistakes. A process beats a hunch.

Consolidating several small, simple pensions can make good sense. But the right order is always: find out what each plan has, decide what you would lose, then decide whether to move.

What this taught me

When I first ran the numbers on a simple pension calculator, the gap was what stopped me: £500,000 growing at 4% a year for 25 years becomes about £1.33 million; at 10% a year it becomes about £5.42 million. These are illustrations, not promises of any return. But they show that the rate your money grows at, after charges, matters far more than most people realise, and far more than the statement makes clear.

What this taught me is that the most expensive pension is the one nobody checks. You don’t have to become an expert overnight. You just have to start asking the right questions, once a year. So here is the one to start with: when did you last compare your pension with anything at all?