Pensions income drops 70% in a decade

The value of the average pensions pot has plummeted 60% over the past decade, according to research by Moneyfacts.co.uk.

The financial advice site blamed a combination of poor stock market returns and plunging annuity rates.

During the same period, the average pensions income has fallen by almost three quarters.

The pensions income of a male who has contributed £100 per month for 20 years, retiring at age 65, has fallen from £8,998 per annum in January 2000 to £2,542 per annum today, a drop of 72%.

To achieve an pensions income on a par with the January 2000 level, those retiring now would have needed to save over £350 per month.

“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,” said Richard Eagling, Moneyfacts spokesperson.

“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.”

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