Royal London Pension Fund Review 2026: Is It Performing for You?
- Alpesh Patel
- 3 days ago
- 5 min read
Updated: 2 days ago
Royal London’s mutual status is frequently cited as a reason to trust it with your retirement savings. Being mutual means there are no outside shareholders to pay dividends to. What it does not mean is that your pension is performing well.
Royal London is the UK’s largest mutual life, pensions, and investment company, with over £170 billion in assets under management and millions of policyholders. Its Governed Portfolio range — a series of risk-graded multi-asset funds numbered 1 through 9 — is widely used as the default investment in Royal London workplace pension schemes and personal pensions. In portfolio reviews, I encounter Royal London Governed Portfolios frequently most often from clients who were enrolled through an employer and have been receiving annual statements without ever questioning whether the fund is genuinely suitable.
The mutual structure is not the relevant question. The relevant question is: what is the fund actually returning, net of charges, compared to what is available elsewhere?
Alpesh Patel OBE is a hedge fund manager, Bloomberg TV alumnus, Financial Times author, and former Visiting Fellow at Corpus Christi College, Oxford. Royal London Governed Portfolio pots appear regularly in GIP portfolio reviews and this analysis is based directly on that client-facing experience.
The Royal London Governed Portfolio Range
Royal London’s Governed Portfolios are numbered 1–9, ranging from the most defensive (GP1, predominantly bonds and cash) to the most growth-oriented (GP9, predominantly global equities). Most workplace pension default funds sit in the GP3–GP6 range, representing balanced-to-moderate growth allocations. GP7–9 carry higher equity exposure and are typically used for growth-focused investors.
The Governed Portfolios invest primarily through underlying Royal London funds covering global equities, bonds, property, and alternatives. The equity component in GP7–9 includes significant exposure to the MSCI World Index, but with an active multi-asset overlay that adds charges and can diverge materially from the index in either direction.
Royal London Pension Charges
Royal London’s Governed Portfolio charges vary by product and distribution channel:
Workplace group personal pension (GPP): typically 0.40–0.75% per year AMC, depending on scheme size and employer contribution levels. The FCA’s 0.75% charge cap applies to auto-enrolment default funds.
Personal pensions (older policies): older Royal London personal pension policies from before 2013 can carry total charges of 0.75–1.25% per year. Some very old policies have higher charges plus adviser trail commission.
Newer Governed Portfolio access: 0.35–0.50% per year for newer workplace schemes and direct personal pensions. More competitive but still above low-cost passive alternatives.
Royal London Governed Portfolio Performance
Royal London’s Governed Portfolio 7 — the highest-equity option used in most growth-oriented default schemes — has historically delivered annualised returns of approximately 7–8% per year gross over 10-year periods, with net returns of approximately 6.5–7.5% after charges. This is broadly comparable to other UK multi-asset managed pension funds and reflects the return drag from the fixed income and alternative allocations relative to a pure global equity fund.
Independent analysis from Yodelar has consistently ranked the majority of Royal London’s pension funds in the lower half of their peer group on 3 and 5-year performance. While not the worst performer in the market, Royal London’s multi-asset range has not distinguished itself on returns relative to the cost of active management.
The 15-Year Gap: Three Scenarios on a £120,000 Royal London Pot
Royal London GP7 (~7% net after charges): grows to approximately £330,000
Low-cost global equity tracker (9.5% net): grows to approximately £454,000
GIP self-directed SIPP (13% net): grows to approximately £648,000
On a £120,000 Royal London pot over 15 years, the gap between staying in GP7 and applying the GIP framework in a self-directed SIPP is approximately £318,000. Run your own numbers at campaignforamillion.com/tools.
Frequently Asked Questions: Royal London Pension
Is Royal London a good pension provider?
Royal London is a financially stable, FCA-regulated, well-regarded institution with a long track record and no outside shareholders. The question is not whether it is trustworthy — it is. The question is whether its Governed Portfolio funds are delivering competitive returns relative to what is available elsewhere. On that measure, the evidence over 5 and 10 years suggests that its managed multi-asset funds have largely lagged the global equity index, as most active managed funds do.
Can I transfer my Royal London pension to a SIPP?
Yes. Most Royal London defined contribution personal and group pensions can be transferred to a self-directed SIPP. Before initiating a transfer, check your policy documents for guaranteed annuity rates (GARs), guaranteed growth rates, or early withdrawal charges. Royal London does not typically charge exit fees on modern policies, but older legacy pensions may have contractual provisions. The transfer process is managed by the receiving SIPP platform and typically takes 4–8 weeks.
What is Royal London Governed Portfolio 7?
Governed Portfolio 7 is Royal London’s highest-equity default fund option, with approximately 70–80% equity exposure and the remainder in bonds, property, and alternatives. It is the Governed Portfolio most commonly assigned to younger members in workplace auto-enrolment schemes as the default growth-phase fund. Over 10 years to 2024, GP7 has returned approximately 7–8% per year gross, with net returns of approximately 6.5–7.5% after charges.
What does Royal London being a mutual company mean?
Royal London is owned by its members (policyholders) rather than external shareholders. This means any surpluses generated are retained within the company or returned to members as bonuses rather than paid as dividends to outside investors. The mutual structure reduces the theoretical conflict between policyholder and shareholder interests. However, it does not guarantee investment outperformance — a mutual fund can underperform just as readily as a shareholder-owned one.
How do I find out which Royal London fund I am in?
Log into your Royal London account at royallondon.com or check your most recent annual pension statement. The statement will show your current fund name and the annual management charge. If you are unsure, contact Royal London directly on their customer services line and ask for your current fund, the OCF, and the 5-year and 10-year annualised return for that specific fund.
If you hold a Royal London pension and want to understand what it is returning and what the alternative looks like, book a free portfolio review here.
Sources & Further Reading
Royal London — Governed Portfolio fund fact sheets, charges, and fund performance. royallondon.com/existing-customers/pensions
Financial Conduct Authority — Workplace pension governance and charge cap regulations. fca.org.uk
Yodelar — Independent UK pension fund performance rankings including Royal London. yodelar.com
Financial Times — UK workplace pension fund performance and mutual company analysis. ft.com/personal-finance
MSCI — MSCI World Total Return Index (GBP). Benchmark reference for comparison with managed pension funds. msci.com/world
S&P Dow Jones Indices — SPIVA UK Scorecard. Active manager underperformance data vs benchmark. spglobal.com/spdji/en/research-insights/spiva
Disclaimer: This article is for educational purposes only. Performance projections are illustrative. This does not constitute personal financial guidance. All investing carries risk. Past performance is not a reliable indicator of future results. Always verify current charges and fund performance directly with Royal London before making any decision.
Alpesh Patel OBE
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