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MONEY COMMENT
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My husband got a great wodge of paperwork sent to him the other day telling him how his personal pension was doing. He took one look at the pages and pages of numbers and put it in a drawer. I'm not surprised - pension statements are remarkably difficult to make head or tail of. And it's also far too easy to let the monthly direct debits go off to your pension fund and assume that everything's hunky dory because you're at least paying into one, unlike many people. It's imperative that you keep an eye on your investment though. The one good thing is that since the introduction of Stakeholder Pensions two years ago, pension charges have fallen. The Stakeholder Pension itself can't charge more than 1% a year in management fees so other types of pension have had to become more competitive. However, a Stakeholder pension is still likely to be the cheapest way of investing in one though, so if you're being charged more than 1% consider moving it. The most important aspect of a pension though is where your money is being invested. Most people simply choose a selection of managed funds when they start and then forget about them. In fact, if you asked my husband what he invested in he wouldn't have a clue other than that some of it is in some kind of ethical fund. (I really must make him get his paperwork back out of the drawer!) As it happens you can check the performance of your funds online – for example at TrustNet or at Standard & Poor's. It's something you should do regularly to ensure your fund managers are doing a good job and that your pension is still on track. Personally, I think investing in a simple index tracker is easier and cheaper. Be warned that if you do want to switch investments or even your whole pension to an alternative one, you may have to pay exit fees. Either way, checking your pension's performance at least once a year is vital if you want to ensure your retirement is as comfortable as it can be. More: How To Understand Your Pension Statement: Part One & Part Two