Pension planning
Many people can tell you roughly how much is in their pension. Far fewer can explain whether it is actually a good pension.
That question has become more relevant following the Government's latest proposals for a pension Value for Money Framework. The aim is to move the workplace pension market away from competing mainly on cost and towards a broader assessment of investment performance, charges and service quality.
That is a positive development. But it still does not fully answer the question an individual is likely to be asking: is my pension good enough for me?
A pension could deliver competitive investment returns and still leave you unable to retire when you hoped. Another pension might never appear near the top of a performance table but could be well suited to your age, attitude to risk and retirement plans.
There are therefore two separate tests. Is the pension arrangement delivering reasonable value? And is it doing the job your retirement strategy needs it to do?
The first question is about the pension. The second is about your life.
On 13 July 2026, the Department for Work and Pensions and the Financial Conduct Authority opened a further consultation on the proposed Value for Money Framework.
The framework is intended to assess in-scope workplace defined contribution pension arrangements across three broad areas: investment performance, costs and charges, and service quality.
The consultation closes on 1 September 2026. Subject to its outcome, FCA rules and guidance are intended to follow in 2027. Larger schemes would begin completing assessments from 2028, with the requirements extending to all in-scope schemes from 2029.
This means the framework is not yet a live consumer rating system. Nor will it immediately provide a simple score for every workplace pension, personal pension, SIPP or retirement drawdown arrangement.
Its main focus is the default arrangements used by people saving into defined contribution workplace pensions.
The principles are still useful more widely, but individuals need to go further. A scheme-level assessment cannot tell you whether you are contributing enough, whether its investment strategy matches your intended retirement date or whether the pension fits alongside your State Pension, savings, property and other income.
Planiva's earlier article on the Pension Schemes Act 2026 explains the wider reforms. Here, the focus is more personal: how should you judge the pensions you already have?
Source: Department for Work and Pensions, Value for Money Framework consultation and Financial Conduct Authority, CP26/25.
Not every pension should be judged in the same way.
Most modern workplace pensions, personal pensions and SIPPs are defined contribution pensions. You build up a pot whose eventual value depends on how much you and your employer contribute, how the money is invested, investment performance, charges, and when and how the pension is accessed.
For these pensions, performance, risk, charges and retirement flexibility are central to the assessment.
Defined benefit pensions, sometimes called final salary or career average pensions, work differently. They promise an income calculated under the scheme rules, usually based on salary, service and retirement age.
The investment performance of a defined benefit scheme's assets is not something an individual member should assess in the same way as a personal investment fund. More relevant questions include how much income has been promised, when it can start, how it increases, what dependants could receive and what happens if you retire early.
A Self-Invested Personal Pension is primarily a pension structure or wrapper. Its quality depends on both the SIPP provider or platform and the investments selected inside it.
A low-cost, reliable SIPP can still produce poor results if its investments are unsuitable, expensive or badly diversified. Greater choice is only useful when that choice is understood and used appropriately.
Combining pensions can make administration and retirement planning easier, but consolidation does not automatically create a better pension. A larger combined balance can hide guarantees, protected retirement ages, preferential annuity rates or other benefits surrendered when older pensions were transferred.
If you are still establishing what pensions you own, start with Planiva's guides to finding forgotten pensions and the developing Pensions Dashboard.
Investment performance gets most of the attention, but contributions are often at least as important.
For a workplace pension, the employer contribution is part of its value to you. A pension with unremarkable investment performance but a generous employer contribution could leave you in a much stronger position than a pension with better recent performance but much less money going into it.
This distinction matters because a pension arrangement can be perfectly competent while the projected outcome remains inadequate.
That does not necessarily mean the pension is poor. It may mean that too little is being paid into it for the retirement you expect.
Investment performance matters. Over several decades, differences in returns can materially affect the eventual value of a pension. But a headline percentage tells you very little on its own.
A fund that has performed strongly over the past 12 months may have benefited from one market, region or type of company performing particularly well. That does not tell you how it has performed through different market conditions or how it may behave in future.
Where the information is available, consider performance across longer periods, such as three, five or ten years, rather than focusing on a single year.
Past performance cannot tell you what will happen next, but a longer history can help show whether the fund has behaved broadly as intended.
A global equity fund should not be compared directly with a cautious mixed-asset fund. One may pursue long-term growth while accepting significant short-term falls. The other may deliberately trade some growth potential for lower volatility.
The relevant question is not simply which fund produced the highest return. It is whether the fund produced a reasonable result for its objective, level of risk and investment period.
A fund's headline performance may not show every cost paid through the pension. The result that matters to you is the return remaining after the relevant costs have been deducted.
Your annual pension statement, provider portal and fund factsheet should help identify the fund, its performance and at least some of the charges. If the total cost remains unclear, ask the provider to explain it in pounds and as a percentage.
A higher return does not automatically indicate better investment management. It may simply reflect greater exposure to risk.
A pension invested largely in shares can rise strongly during favourable markets, but it may also experience larger falls. A more diversified fund may produce lower returns during a market surge but provide greater stability when conditions deteriorate.
Many workplace default funds use a lifestyle or target-date strategy. This often means they gradually change investments as you approach the retirement age recorded by the provider.
That can become a problem if the recorded age is wrong. A fund might start reducing investment risk because it assumes you will retire at 65, while you actually intend to continue working until 70. Alternatively, it might remain invested for growth when you plan to access the money sooner.
The strategy may also assume you will use the pension in a particular way, such as buying an annuity, taking cash or entering drawdown.
MoneyHelper recommends checking the risk, performance and charges of pension investments at least annually, with more frequent reviews potentially useful as retirement approaches.
Lower charges leave more money invested. That makes charges important, particularly when they compound over many years.
But cheap and good value are not identical.
The Pensions Regulator states that value for members does not necessarily mean low cost. The relevant question is what members receive in relation to the costs they bear.
A slightly more expensive arrangement might justify some of that difference through stronger investment governance, better administration, useful planning tools, clearer reporting, broader retirement options or reliable customer support.
Equally, additional cost does not automatically mean additional value. A polished app or large investment menu is not worth much if the investments are poor, the administration is unreliable or the features are never used.
This issue can be particularly important in older personal pensions. In July 2026, the FCA published findings from a review of unit-linked non-workplace pensions and savings. It found that some customers in legacy products were receiving poorer value than customers in newer arrangements, often because of older product structures, multiple layers of charges and inadequate data.
That does not mean every old pension is poor. Some older pensions contain extremely valuable guarantees. It means age alone should not be treated as evidence that a pension is either better or worse.
Sources: The Pensions Regulator, Value for members and Financial Conduct Authority, unit-linked pensions and savings review.
Investment returns attract attention. Administration usually becomes visible only when something goes wrong.
For workplace pensions, governance may be provided by trustees, an Independent Governance Committee or another oversight arrangement, depending on how the pension is structured.
Good governance should challenge costs, investment performance, administration and the quality of member outcomes.
Communication matters too. A provider should explain charges, investment choices, retirement options and risks in language members can understand. Sending large quantities of generic information is not the same as communicating well.
Online tools can add genuine value when they help you see where your money is invested, understand performance, check contributions, update beneficiaries, change your intended retirement age, explore retirement options and obtain clear documents.
But online presentation should remain a supporting factor, not the main test of pension quality.
A pension may look acceptable during the saving stage but prove restrictive when you want to use it.
Some older pensions offer limited modern flexibility. Transferring to another arrangement might provide more options, but it can also mean losing valuable benefits.
Potential benefits to check include guaranteed annuity rates, protected pension access ages, protected tax-free cash, with-profits bonuses, guaranteed investment returns and enhanced death benefits.
Do not transfer or consolidate a pension until you understand whether any of these apply.
Planiva's articles on annuities and drawdown and tax-free pension cash explore how retirement options can affect the wider plan.
The temptation to rank pensions by recent performance is understandable. It is also unreliable.
A younger saver may have several decades before retirement and be willing to accept substantial short-term market falls in pursuit of longer-term growth. A pension with more growth assets may fit that objective, but recent outperformance still does not prove it will continue.
Someone planning to access a pension soon may place greater importance on reducing the risk of a major fall immediately before withdrawals begin. A fund that lags a rising share market because it holds more defensive assets may be behaving exactly as designed.
An older pension might offer lower investment flexibility or apparently higher charges but include a guaranteed annuity rate or another benefit that would be expensive or impossible to replace.
A performance comparison that ignores risk, timing and guarantees misses a large part of the pension's value.
The highest-performing option is therefore not automatically the best. Performance must be considered alongside risk, charges, time horizon, benefits and purpose.
Even a well-run, reasonably priced and appropriately invested pension can still fail to deliver the retirement you expect.
The reason may have little to do with the pension provider. Contributions may have been too low, saving may have started later than planned, you may want to retire earlier, expected spending may have risen or inflation may have reduced future purchasing power.
The opposite can also be true. A pension with relatively modest performance might still form part of a strong retirement plan where the household also has State Pension income, a defined benefit pension, ISAs, cash savings, rental income, lower spending or a later retirement date.
This is why a pension cannot be assessed properly in isolation.
A retirement plan needs to bring together pension pots, State Pension entitlement, savings and ISAs, investments, property or employment income, expected spending, tax, inflation, retirement age, household circumstances and how long the money may need to last.
As Planiva explains in Why retirement is really cashflow planning, the size of a pot is only part of the answer. Timing, income, withdrawals, tax and spending determine how the plan works in practice.
The better question is not whether your pension has beaten the market. It is whether the pension, together with your other resources, can support the retirement you want.
Use these questions when reviewing a pension. They are not a provider comparison or a recommendation to switch. They are a way to identify what you understand, what you still need to find out and which issues may require professional help.
You may need regulated financial advice where you are considering transferring a defined benefit pension, a pension contains safeguarded or guaranteed benefits, you are uncertain whether investments are suitable, you are planning major pension withdrawals, or tax, inheritance and household circumstances are complex.
MoneyHelper and Pension Wise provide free and impartial guidance that can help you understand pension types, retirement options and questions to raise with providers or advisers.
Sources: MoneyHelper and Pension Wise.
The proposed Value for Money Framework should make workplace pensions more transparent and place greater pressure on poor-value arrangements to improve.
But no scheme-level framework can answer the entire personal question.
A good pension is not simply one with low charges. It is not necessarily the pension with the strongest recent investment return. It is not automatically the pension offering the widest investment choice or the most impressive app.
A good pension is appropriately invested, reasonably priced, well run and flexible enough to perform the role required of it.
Even then, the final test sits outside the pension itself.
The real question is whether the pension, together with your other assets and income, enables you to achieve the retirement you want.
Because a pension is only one component of a retirement strategy.
The objective is not to own the pension that wins a performance table. It is to build a retirement plan that works.
Department for Work and Pensions: The Value for Money Framework consultation
Financial Conduct Authority: CP26/25, The Value for Money Framework
The Pensions Regulator: Value for members
Financial Conduct Authority: Review of unit-linked pension and savings value
MoneyHelper: Pension investment options
MoneyHelper: Pension fees and charges
Understand the wider workplace pension reforms, including the proposed Value for Money framework.
See why retirement depends on income, spending, tax and timing rather than pension-pot size alone.
Build a complete picture of old pensions, savings and investments before assessing your retirement position.
Explore the trade-offs between secure retirement income and flexible pension withdrawals.
Bring together pensions, savings, State Pension, income and spending assumptions in Planiva.
Use Planiva to bring together your pensions, savings, State Pension, other income and retirement spending assumptions. Compare different retirement ages, spending patterns and investment assumptions to see how changes affect long-term affordability. Planiva provides planning and scenario modelling, not regulated financial advice, pension-provider ratings, investment recommendations or transfer advice.
