What's In Your Pension Fund?

The introduction of a charge cap on pensions from next April will mean more workplace schemes will include a blend of low cost passive and active funds

Emma Wall 31 October, 2014 | 11:14AM
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This article is part of the Morningstar's Guide to Active vs Passive Investing. Click here for our edit on how the experts use the tools at their fingertips, finding out whether you prefer one to the other and examining how to blend active and passive investing for profit.

Do you know what is in your workplace pension scheme? The vast majority of workers choose not to engage with their retirement savings plan – with 99% of workers who have been auto-enrolled into a pension over the last two years opting for the default scheme on offer.

These pensions are defined contribution (DC) schemes, which determine the pay-out at retirement based on the amount you contribute during your working life. Two years ago auto-enrolment was introduced to ensure that every worker in the UK was offered a pension scheme by their employer. Starting with the largest companies, employers have automatically enrolled their workers into DC pension schemes. The smallest companies in the UK – the last to fulfil the requirements – will auto-enrol their workers in 2018. By that point, around 10 million people will eventually be enrolled into schemes.

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About Author

Emma Wall  is former Senior International Editor for Morningstar