Despite the predictions of growth for the UK economy, with pension annuities, pension funds are still continuing to fall. Yes, the value of the nation’s pension funds has fallen again over the last month. Pension funds in the UK have shrunk further over the past four weeks, with a 30 year old’s and 60 year old’s annual annuity income falling by an average of £518 and £358 respectively, according to recent research from Aon Consulting. These latest falls mean that a 30 year old paying 10% of a 25,000 salary to a defined contribution money purchase scheme with an existing fund of £15,000 would be on course to building up a retirement pot of around £19,500 a year. However, with many people paying in substantially less, a far smaller pension fund will be on the cards for many others.
The future financial conditions for 65 year olds is even more worrying to consider, with the predicted retirement income now below half of the adequate standard of living, with an annual income averaging just over £7,600. On such an income, even those who plan to retire abroad would struggle to achieve a decent standard of living. Richard Strachan, of Aon, states that although we have seen some improvement to this country’s economic circumstances in the past six months, pension funds pots are in only marginally better shape than this time in 2009 and due to the continuing volatility in stockmarket activity, pension annuities funds shrank once again during the last month.
