Consumers approaching retirement may be disappointed to find that their prospects could be worsening, as the average annuity income fell during the third quarter (Q3) of 2021. Moneyfacts.co.uk has warned consumers to review their pension provisions as they may face an unexpected retirement shortfall.
Ms Springall said: “The majority of pension fund sectors are still offering positive returns, but there has been a notable shift compared to Q2 2021, when 91 percent of pension funds returned growth compared to 64 percent in Q3 2021.
“The average pension returned less than one percent, at 0.45 percent during Q3 2021 compared to 4.1 percent during Q2 2021.
“Compared to the equivalent quarter a year ago (Q3), fund returns have worsened slightly in 2021, but it is worth remembering that 2020 overall was hit hard by the impact of the coronavirus pandemic.
“The volatility to fund sectors makes it ever-more prudent for consumers to monitor where their cash is invested, but it is also important that they seek advice to ensure they don’t switch their funds in haste.”
However, there has also been some more encouraging developments in the arena of pension saving equality, an issue which has long been present and has often meant women having significantly lower retirement savings than men.
According to the Scottish Widows Women & Retirement Report, the same proportion of men and women are now saving enough for a comfortable retirement (61 percent) for the first time on record.
Ms Springall said: “In positive news, recent research has revealed some consumers have taken steps to save more for their retirement.
“A change of mindset could well have developed for these consumers if they were impacted financially by the pandemic and felt they needed to make more provisions for their future.
“A recent study from Scottish Widows revealed the same proportion of men and women are now saving enough for a comfortable retirement (61 percent) for the first time on record.
“This is a huge step in the right direction, and hopefully this momentum continues for the foreseeable future and isn’t just a temporary change.”
She also offered tips for people looking to address any worries they have over whether their pension pots will be sufficient when they retire.
Ms Springall said: “Consumers concerned with a pensions shortfall in retirement may be wise to consider alternative ways to boost their income, perhaps with rental income from investing in property through buy-to-let or releasing equity out of their home by equity release.
“However, both areas require careful consideration and getting independent advice before committing to any arrangement is wise.”