Pension Incomes Highest in 30 Months

Research from financial comparison website moneyfacts.co.uk has suggested that retirement incomes are now at their highest level since the end of 2008. The average pension income has reached £1,639, a 1.7% increase from last year.

Moneyfacts’ Editor of Investment Life & Pensions, Richard Eagling commented: “Given the headache high inflation is currently posing, the fact that annual retirement incomes have been rising since the turn of the year will at least offer a crumb of comfort for those on the verge of retirement”.

This positive news has been attributed primarily to annuity income growth, which has reached levels of 3.7% for a female and 3.6% for a male. Moneyfacts also suggested that improved pension fund performance also contributed, with the average fund reaching returns of 13.83% in 2010.

However Mr Eagling warned that the growth may not continue for long, suggesting that “much of this recent increase is due to higher annuity rates, a trend that is unlikely to persist in the long term. Sadly, the recent uplift in average retirement income may ultimately prove to be little more than a temporary respite in the uphill battle to secure a comfortable retirement.”