Worrying data was revealed this week regarding retirement income. A male pension at the turn of the millennium that was worth £8,998 per year is now worth just £2,542.
A fall in the stock market, as well as a fall in annuity rates has meant that pensioner income has been “decimated”, according to financial website Moneyfacts. Average pension payouts have fallen by a massive 60% over the last ten years, according to the company’s 3 monthly report. In fact things could have been a lot WORSE, had it not been for the recent rally on the stockmarket which meant that in 2009 the average pension fund grew by 22.35%, the highest return 1999.
But over the last ten years as a whole, falling pension fund returns have compounded the problem of falling rates for annuities. And with gilt yields down and life expectancy rates up, there really is very little for potential annuitants to be cheerful about.
Richard Eagling who works for Moneyfacts commented that “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. However, unless individuals increase their contributions and take greater interest in the returns generated, the next decade could prove just as disappointing.”
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