The latest projections for pension income paint a picture of the future that seems even gloomier than before. The bottom line seems to be that pensions income continues to be blighted by the spectre of the Noughties, just when we thought it was safe to go back in the water.
Earlier this year we learned that volatile stock markets had, in just 2 years, wiped around £3,000 off the likely annual pensions income of a 60 year old hoping to retire at 65. This left her with an annual pension income of around £10,824. Now we hear that a further £358 was cut from that person’s private pensions income, during July alone.
Experts seeking an underlying cause are pointing to the mixed fortunes afflicting differing sectors of the economy, as we struggle with the expiring red dragon of the recession.
Those private pensions with larger exposure to BP and underperforming industrial and retail sectors will continue their downward spiral, until such times as they are rebalanced to account for current stormy conditions. With nearly 100 of the UK’s larger investment funds in their 3rd year of underperformance, pension savers are learning the hard way not to take their eye off the ball.
The tragedy is that there are always better-performing funds out there - it is our habit of not reviewing our pension investments annually, that leaves us at the mercy of the markets.
Look at it this way – an hour spent reviewing her pensions savings with her financial adviser could have saved our pensions saver over £2,000 in lost income, for every year of her retirement!
Are you detecting a shortfall in your projected pension income, due to the recent volatility in the stock markets? Tell us about it here.
