Pension pots are shrinking at a worrying rate leaving 65-year-old people with less than half the money they need to fund an adequate standard of living.
The figures, calculated by employee benefits company Aon Consultancy, show that the annual average pension income now stands at £7,666 – the Joseph Rowntree Foundation currently recommends that pensioners need an income of £14,400 to live a settled retirement life.
Richard Strachan, senior consultant at Aon, said: “Though we have seen some improvement to economic circumstances in the past six months, pension pots are in only marginally better shape than this time last year and due to the volatility in stock market activity, pension pots shrank once again during the last month”.
He added: “Individual pension investors should keep a watchful eye on their pension pots to ensure their retirement plans are on track, and make suitable provision for their future”.
Some experts suggest strengthening their pension investments through careful strategies. “Instead of holding a number of smaller pension pots with different providers, consolidation into one pension plan may be a wise move”, said David Abbis, writer for the research company Defaqto. “Planning can then be made towards retirement, with sensible investing and monitoring hopefully resulting in better performance”, he added.
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