New research suggests many savers underestimate the cash their pensions generate, with pension funds generating more returns than most Britons expect.
Industry data shows that major pension funds have given people with 30 years until retirement an average annual return of 7.72% over the past five years.
In an earlier study, the same researchers found that more than a third of savers between the ages of 18 and 54 expected returns of only 5% to 7%.
The best-performing funds, all with average five-year returns of more than 8% for young savers, were offered by Aviva, Nest and PensionBee, the company that carried out the research.
For those nearing retirement, however, pensions were more in line with expectations, with an average return of 5.25% for those five years after the state pension age of 66.
According to the survey, 37% of people over 55 believe that a realistic return is between 5% and 7%.
Claire Reilly, Chief Engagement Officer at PensionBee, said: “These results demonstrate the importance of long-term planning and investment in pension funds.
“The average performance of the fund exceeds savers’ expectations, demonstrating that with a well-planned strategy, pensions can deliver high returns over the long term.
“This finding highlights the value of continued engagement with a pension scheme, as well as the importance of choosing a provider that offers flexibility in investment strategies based on individual schedules and risk profiles. .
“We encourage savers to stay focused on their long-term goals and make the most of growth opportunities while building savings for a happy retirement.”
This comes as separate research carried out in early September found that women are more likely than men to keep their long-term nest eggs in savings accounts rather than ISAs or pensions. It was received and announced.
According to Scottish Friendly’s Family Finance Tracker, almost half of women (46%) keep their long-term money in a savings account rather than a pension or isa, compared to 39% of men. .
Long-term savings was defined as thinking more than five years ahead, such as saving for retirement, saving money for real estate, or starting a business.
The study was commissioned by Scottish Friendly in collaboration with the Center for Economics and Business Research and surveyed 2,600 people across the UK.
