Pension funds have been delivering an average annual growth of nearly 8 per cent over five years for those 30 years from retirement.
PensionBee’s Pension Performance Benchmark analysis looked at a number of pension providers which found savers could be underestimating the potential growth of their pensions.
It revealed pension funds have delivered an annual return of 7.72 per cent over the past five years for those 30 years from retirement, 5-7 per cent higher than expected by 34 per cent of savers, according to a previous PensionBee survey.
For savers nearing retirement, PensionBee found average returns of 5.27 per cent over the same time period.
This performance aligns more closely with PensionBee’s previous survey of public expectations as it found 37 per cent of the over 55s believed a realistic return was between 5 and 7 per cent.
PensionBee said the findings emphasised that while pension growth could be substantial over a longer time horizon, savers’ expectations were broadly in line with the actual performance of funds closer to retirement.
Clare Reilly, chief engagement officer at PensionBee, said: “The findings underline the value of continued engagement with pension plans, as well as the importance of selecting a provider that offers flexibility in investment strategy based on individual timelines and risk profiles.
“We encourage savers to remain focused on their long-term goals and make the most of growth opportunities while they’re still accumulating savings in order to have a happy retirement.”
alina.khan@ft.com
