Shortfall in capital in pension funds may adversely affect your personal pension
Several pension benefit schemes offered to you might suffer from a serious shortfall of capital so far as your pension fund is concerned. As a result you do not get the entire benefits as promised to you. Thus the benefits you get are much lower than what you had expected originally. You may not have sufficient funds to have the childrens stakeholder pensions.
Such shortfall in pension funds could be caused due to various reasons. One of such reasons could be poor allocation of means to the pension fund. It happened during 2000-03 when there was a sever market crash. Overuse of equities prior to that adversely affected pension fund. Controlled equity release would have averted this problem. There were questionable policy decisions that affected the pension funds even when the market became stronger during 2004-06.
Rapidly improving life expectancy and improper assessment of its affect on the annuity rates have also resulted in reduction of interest rates and thus the overall quantum of the pension funds. At times the funding by the employers is highly inadequate being too low. This was not given much attention since there was strong growth in the stock market in Great Britain since 1990s.
Ordinarily the occupational schemes will help you build up a fund that would be used by you as your pension after retirement. These plans of retirement pensions are also known as defined contribution or money purchase plans. However your pension will depend on a number of factors not known to you like returns you get on investments, charges on such investment and the annuity rate level at the time of your retirement.