Poor return from pension funds and the abolition of tax incentives has created an environment where saving for retirement is appearing less and less appealing. That’s the view of a leading corporate accountancy company. As an example, a UK pension pot of £100,000 will create annual annuity payments of £7,000 a year – which is £2,000 less than in the year 2000.
However those who have invested money in savings accounts have in the same period done much better it would appear, with these types of accounts on average growing at twice the rate of the average pension scheme between January 2000 and December 2009. The typical occupational scheme grew at 2.25% between January 2000 and December 2009. Cash on deposits grew at 4.7% in contrast to this.
Linda Bell from KPMG commented that “major volatility in equity markets at the start of the decade and at the end for the poor performance”.
