Covid-19 has caused the average pension fund value to fall by 15.2 per cent in Q1 2020, according to the Moneyfacts UK Personal Pension Trends Treasury Report.
This represents the largest quarterly fall in value on record due to the coronavirus’s impact on global stock markets.
Furthermore, the average annuity income declined by 6 per cent between January and March 2020, also to the lowest level on record.
According to Moneyfacts’ data, the average annuity income for a 65-year-old was 1.7 per cent lower than the previous record low in October 2019.
The report added that “many popular ABI pension fund sectors” posted heavy losses, with just 11 per cent of pension funds avoiding losses during Q1 2020.
Commenting on the findings, Moneyfacts head of pensions, Richard Eagling, said: “Whether it is individuals saving into a pension scheme or currently in drawdown, or retirees looking for the security of an annuity, the coronavirus pandemic has had a devastating impact on potential retirement outcomes.
“The hope is that these will prove to be short-term shocks, but for those planning for retirement now and looking for a retirement income immediately, they present unenviable challenges.
“UK pension policy has increasingly moved towards placing more onus on individuals to take personal ownership of their retirement finances in recent years and take on the risks associated with this, but unfortunately recent events have shown how vulnerable they can be to major world events.”
— to www.pensionsage.com
