Best of the Week
Most Popular
1.Canada Real Estate Bubble - Harry_Dent
2.UK House Prices ‘On Brink’ Of Massive 40% Collapse - GoldCore
3.Best Cash ISA for Soaring Inflation, Kent Reliance Illustrates the Great ISA Rip Off - Nadeem_Walayat
4.Understanding true money, Pound Sterling must make another historic low, Euro and Gold outlook! - Marc_Horn
5.5 Maps That Explain The Modern Middle East - GEORGE FRIEDMAN
6.Gold Back With A Vengeance As Bitcoin Bubble Bursts - OilPrice_Com
7.Gold Summer Doldrums - Zeal_LLC
8.Crude Oil Trade & Nasdaq QQQ Update - Plunger
9.Gold And Silver – Why No Rally? Lies, Lies, And More Lies - Michael_Noonan
10.UK Election 2017 Disaster, Fake BrExit Chaos, Forecasting Lessons for Next Time - Nadeem_Walayat
Last 7 days
Saving Illinois: Getting More Bang for Its Bucks - 24th Jul 17
3 Stocks Sectors That Will Win in The Fed’s Great Balance-Sheet Unwind - 24th Jul 17
Activist Investors Are Taking Over Wall Street, Procter and Gamble Might Never Remain the Same - 24th Jul 17
Stock Market Still on Track - 24th Jul 17
Last Chance For US Dollar To Rally - 24th Jul 17
UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - 22nd Jul 17
Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts - 22nd Jul 17
Warning: The Fed Is Preparing to Crash the Financial System Again - 21st Jul 17
Gold / Silver Shorts Extreme - 21st Jul 17
GBP/USD Bearish Factors - 21st Jul 17
Gold Hedges Against Currency Devaluation and Cost Of Fuel, Food, Beer and Housing - 21st Jul 17
Is It Worth Investing in Palladium? - 21st Jul 17
UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - 21st Jul 17
The Fed May Show Trump No Love - 20th Jul 17
The 3 Best Asset Classes To Brace Your Portfolio For The Next Financial Crisis - 20th Jul 17
Gold Stocks and Bonds - Preparing for THE Bottom - 20th Jul 17
Millennials Can Punt On Bitcoin, Own Safe Haven Gold For Long Term - 20th Jul 17
Trump Has Found A Loophole To Rewrite Trade Agreements Without Anyone’s Permission - 20th Jul 17
Basic Materials and Commodities Analysis and Trend Forecasts - 20th Jul 17
Bitcoin PullBack Is Over (For Now): Cryptocurrencies Gain Nearly A 50% In Last 48 Hours - 19th Jul 17
AAPL's 6% June slide - When Prices Are Falling, TWO Numbers Matter Most - 19th Jul 17
Discover Why A Major American Revolution Is Brewing - 19th Jul 17
iGaming – Stock Prices - 19th Jul 17
The Socionomic Theory of Finance By Robert Prechter - Book Review - 18th Jul 17
Ethereum Versus Bitcoin – Which Cryptocurrency Will Win The War? - 18th Jul 17
Accepting a Society of Government Tyranny - 18th Jul 17
Gold Cheaper Than Buying Greek Villas in 2012 - 18th Jul 17
Why & How to Hedge the Growing Risks of Holding Stocks - 18th Jul 17
Relocation: Everything You Need to do for a Smooth Transition Abroad - 17th Jul 17
A Former Lehman Brothers Trader: It’s Time To Buy Brick And Mortar Retailers - 17th Jul 17
Bank Of England Warns “Bigger Systemic Risk” Now Than 2008 - 17th Jul 17
Bitcoin Price “Deja Vu” Corrective Sequence - 17th Jul 17
Charting New Low in Speculation in Gold and Silver Markets - 17th Jul 17
Bitcoin Crash - Is This The End of Cryptocurrencies? - 17th Jul 17
The Fed's Inflation Nightmare Scenario - 17th Jul 17
Billionaire Investors Backing A Marijuana Boom In 2017 - 17th Jul 17
Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - 17th Jul 17
Gold and Silver Biggest Opportunity Since Late 2015, Last Chance at These Prices - 17th Jul 17
Stock Market More to Go - 17th Jul 17
Emerging Markets & Basic Materials Stocks Breaking Out Together - 16th Jul 17
Stock Market SPX Uptrending Again After Microscopic Correction - 15th Jul 17

Market Oracle FREE Newsletter

Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts

UK Retirement Incomes Hit 33-month High as Record Numbers Turn to Personal Pensions

Personal_Finance / Pensions & Retirement May 11, 2017 - 11:59 AM GMT

By: MoneyFacts

Personal_Finance

Key findings:

· Average retirement incomes increased by 5.2% in Q1 2017 and have risen by almost 15% over the last year. They are now at their highest level since July 2014.

· Retirement incomes have been boosted by strong pension fund returns and generally higher annuity rates.

· The uplift comes at a time when personal pension membership and contributions are at record highs.


A new report by Moneyfacts has revealed an ongoing improvement in retirement incomes at a time when HMRC statistics show that personal pension membership and contributions are at record highs.

The new research, contained in the Moneyfacts Personal Pension and Annuity Trends Treasury Report, found that for the second quarter running the average retirement income for an individual saving into a personal pension and then taking an income through an annuity has increased, rising by 5.2% during Q1 2017.

The report assessed the impact of the changing value of personal pension pots and annuity rates on retirement incomes. The figures are based on an individual contributing £100 gross per month into an average personal pension fund over a 20-year period and retiring at the age of 65 with a standard level without guarantee annuity. Table 1 shows that someone who had paid £100 gross per month into an average personal pension fund for the preceding 20 years would have built up a pension fund of £47,864 if they retired now, compared with £42,457 if they had retired in April 2016. When this pension pot is converted into an annuity, it equates to an average annual retirement income of £2,273 today compared with £2,159 in Q4 2016 and £1,983 in Q1 2016. Consequently, the average retirement income has risen by 14.6% over the last year and is at its highest level since July 2014.

Table 1: Average retirement income April 2016 - April 2017

Pension fund figures as at 1 April 2017 (based on a gross monthly premium of £100) and based on the average of all available pension funds. Source: Lipper. Annuity figures based on a male annuitant aged 65 buying a standard ‘level without guarantee’ annuity. Source: Moneyfacts.


The report found that a combination of strong recent pension fund returns and generally higher annuity rates has boosted retirement incomes. The average annual income payable from a standard level without guarantee annuity for a 65-year-old increased by between 0.4% and 2.3% in Q1 2017 (depending on purchase price), while the average pension fund delivered a return of 4%. Overall, 95% of all pension funds delivered positive growth in Q1 2017, with 6% of these posting 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. 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.”

The Moneyfacts Personal Pension and Annuity Trends Treasury Report, out later this month, provides a comprehensive review of the UK personal pension and annuity sectors, with detailed analysis of annuity rates, pension fund returns and maturity values.

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife