10 February 2010
According to Moneyfacts, the amount of pension likely to be
bought by someone investing for their retirement has fallen by 72
per cent in the past ten years.
Putting £100 a month, for 20 years, into a balance managed
fund would have produced £103,914, ten years ago. A similar
20-year policy cashed in this year would have provided just
£40,749.
Combined with a fall in annuity rates, the retirement income
provided by this savings strategy would have dropped from
£8,998 a year to just £2,542.
Richard Eagling of Moneyfacts said, "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. The
situation facing many pension savers would have been even more
desperate had it not been for the recent stock market revival,
which saw the average pension fund grow by 22.35 per cent in 2009,
the highest annual return since 1999."
