In 2024, many UK default pensions for those nearing retirement didn’t grow as much as savers hoped they would. A default pension is the fund that you’re automatically placed into if you don’t choose a specific fund yourself. They’re designed to be suitable for the average saver by age group and most UK employees are likely invested in their workplace’s default pension fund.
A PensionBee survey last year found 55% of savers aged 55 or over see 5% or more as a ‘good’ return. In 2024, average performance for many UK default funds for this age group dipped below that threshold.
While some performed better than others, Corporate Adviser’s Master Trust annual benchmark shows that the average annualised returns fell from 5.73% in 2023 to 4.91%*.
For savers who’re just five years away from State Pension age (which is currently 66), these annualised returns are lower than they’d hoped. PensionBee’s 4Plus Plan outperformed most default funds with annualised returns of:
- 10.34% in 2023; and
- 10.24% in 2024.
The 4Plus Plan has been part of the PensionBee plan range since 2018 and became the default fund for savers age 50 and over from February 2025.
*Data from Corporate Advisers Master Trust and GPP Defaults Report 2024 and 2025. PensionBee data supplied directly from State Street Investment Management. Data from 1 January 2024 - 31 December2024. All figures are gross of fees.
How is the 4Plus Plan invested?
The 4Plus Plan is our default pension plan for savers aged 50 and over. As retirement approaches, and savers start to make withdrawals, most savers want to balance certainty with stability when it comes to their pot. The 4Plus Plan is designed to help savers transition into retirement while delivering consistent performance during those years.
It does this by investing in a range of assets that are adjusted on a weekly basis. The mix of assets includes:
company shares (also known as equites) for higher growth potential; and
bonds and cash for lower but steadier returns.
A team of experts at State Street monitor market conditions to ensure a balance between growth and stability. The plan aims to deliver long-term growth of 4% above the Bank of England’s base rate over a minimum five-year period.
Despite volatile stock markets, in 2024, the annualised returns for the 4Plus Plan were 10.24% - more than double the market average.
Find out more about the 4Plus Plan.
How can I check my pension fund?
If you’re close to retirement, there are a few things you can do to ensure your pension is on track.
Clare Reilly, Chief Engagement Officer at PensionBee, says: “Despite volatile markets, our 4Plus Plan’s double-digit returns demonstrate that with an actively managed approach, it’s possible to achieve strong performance and offer greater protection for those approaching or in retirement.”
1. Review your plan’s performance
To check your pension’s performance, you can look at your annual statement or log onto your online account. If you’re enrolled in a workplace pension and aren’t sure who the provider is or where to find the information, ask your employer.
If you’re a PensionBee customer, you can find your annual statements in your online account (also known as your ‘BeeHive’). Simply log in, head to ‘Account’ and then ‘Resources’.
You can also find historic fund performance information in your BeeHive. Once you’ve logged in, tap the ‘Analytics’ tab and then ‘Performance’. Your plan’s fund performance chart shows how £10,000 would’ve grown if you’d invested that money five years ago. Remember, past performance isn’t an indicator of future performance and the value of your pension can go down as well as up.
2. Think about your retirement plan and goals
Think about the kind of retirement lifestyle you want and when. What is your desired retirement age? And how long do you have to keep saving before you get there? You can use PensionBee’s Pension Calculator to see how much income your pension could generate in retirement. Plus you can use the toggles to see how adjusting your contributions could impact your pot.
3. Consider switching plans
If you still have a few decades before you plan to retire, you might consider switching to a higher risk plan for more growth potential. Whereas if you’re approaching retirement age, you might want to gradually reduce risk. PensionBee has a range of pension plans for various savings needs. Find out what you need to know before you consider switching plans and how to do it.
Risk warning
As always with investments, your capital is at risk. Past performance isn’t an indicator of what will happen in the future. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
