Britain's booming pension funds see retirement income surge by 12 per cent

Average invested savings have jumped by around £5,400 in the last 12 months to sit at an average £47,864 in April 2017, compared to £42,457 in the same month last year, a report by Moneyfacts.co.uk showed.

On top of higher annuity rates, it means that retirees have seen income from the insurance products surge by 14.6 per cent during the same time period.

Someone aged 65-years could now expect a typical annual income of £2,273, compared with £1,983 in the same period last year.

It comes as stock markets in Britain have reached new record highs in 2017.

This has helped see the average pension fund deliver a return of four per cent in the first three months of this, year with 95 per cent of funds delivering positive growth.

Some six per cent of the funds, which hold millions of pounds of Britons’ pension savings, have seen double-digit growth.

Richard Eagling, head of pensions at Moneyfacts, said: “The record numbers saving into personal pensions and defined contribution pension schemes have placed even greater importance on the ability of funds to deliver strong performance if individuals are to generate an adequate retirement income.”

Mr Eagling added: “The fact that the average pension fund has now delivered positive returns in every calendar year since 2012 has arguably made it easier for individuals to accept the investment risks inherent in the defined contribution pension model than might otherwise have been the case.

“Whether the recent enthusiasm for personal pensions and the low opt-out rates for auto-enrolment will continue should we see a sustained period of falling investment returns remains to be seen.”

Daily Express :: Personal Finance Feed


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