Pension incomes have shrunk by 73 per cent since 2000, according to new research.
Poor-performing pension funds and falling annuity rates are to blame says the Moneyfacts website which produced the study. The result is that workers dreaming of transforming their retirement fund into a pension income – by annuity – are putting off leaving work to accrue greater savings.
Moneyfacts says generating income from savings is among the biggest difficulties faced by retired people, with people’s plans for the future at risk.
Richard Eagling, the website’s investment life and pensions editor, said: “There’s a real danger that tomorrow’s pensioners will end up in poverty.
“Dreams of a comfortable retirement could easily be shattered unless individuals can either make up the pension shortfall through greater contributions or accept that they have to delay their retirement.”
“It is vital to increase awareness not only of pension options, but also the potential retirement income outcomes, as too many people have outdated and unrealistic expectations as to what they will eventually receive.”
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