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Pension News Pension Incomes Fall 70 Per Cent Over Past Decade 18470436


Pension incomes fall 70% over past decade

Pension incomes fall 70% over past decade

10 February 2010 / by Andy Davies

Pension incomes have fallen by more than 70 per cent in the past 10 years, according to Moneyfacts.co.uk.

In its quarterly insight into personal pension payouts it has found that the average annual retirement income has fallen from almost £9,000 in 2000 to around £2,500 in 2010.

In addition, it has been revealed that the average pension pot has shrunk by 60 per cent over the last decade.

According to Moneyfacts.co.uk’s findings, an individual who had paid £100 gross per month into a balanced fund for the past 20 years would have built up a pension fund of nearly £41,000 if they retired now, compared to a fund of nearly £104,000 if they had retired in 2000.

Meanwhile, the average monthly annuity payout per £10,000 has fallen by £242 in the past decade to £624.

Commenting, Richard Eagling, editor of Investment Life & Pensions at Moneyfacts.co.uk, is not surprised by these findings.

“Given that the last decade presided over a dotcom crash and a credit crisis, it is hardly surprising that pension funds have performed so poorly,” he said.

However, he warned that the next decade “could prove just as disappointing” if people do not increase their pension contributions to combat market conditions.

“Although these figures do little to inspire confidence, they at least serve as a powerful reminder of the investment risks inherent in saving via a defined contribution pension. It is clear from such alarming statistics that if the pensioners of tomorrow are to enjoy the same level of retirement as their predecessors, much has to change and quickly,” he added.

© Fair Investment Company Ltd  

 



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