Ways to pep up your pension returns

“Alternative” investments can be risky, but are worth considering if you want to increase your pension returns.

Savers whose retirement funds are invested only in "conventional" assets could be missing out, according to a new study by pension specialist JLT Employee Benefits. The research suggests that allocating 20% of portfolios to illiquid alternative investments could boost the value at retirement of the typical fund by up to 12%.

Investments in this category include private equity, private debt, infrastructure and real estate. Many occupational pension funds routinely ignore these asset classes, notes JLT, focusing instead on listed equities and bonds. Savers with private pensions also rarely invest in alternative assets.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.