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Millions of pensioners face shortfalls on their predicted pension pots
23/12/2011
It has been recently reported in the National press that millions of individuals approaching retirement are likely to receive a shock when they discover that their pension pots have only grown on average by 4% as opposed to the 9% indication that they were sold when initially investing in schemes.
A person retiring today that took out a typical pension 15 years ago, sacrificing £200 a month, can expect to receive a pension return of £47,474 - the expectation to this individual would have been to receive a pot worth £106,000. Having paid in £36,000 over the years, this is a huge shortfall in expectation.
In response to this mis-communication the Financial Services Authority (FSA) regulator is intending to look into how pension forecasts can be made more realistic to avoid this situation happening to new investors.
Forecasts have remained unchanged for more than ten years and were last reviewed following the collapse of Northern Rock in November 2010.
Homeowners aged over 55 years who have been affected by the downturn in the economy and would like to know how much money the value of their property could release to increase their income, can find out by contacting therightequityrelease.co.uk for equity release advice.
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