Retirement incomes hit 33-month high | will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be Scamsmart.

ARCHIVED ARTICLE This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Published: 10/05/2017
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Being comfortable in retirement can all come down to the level of income you have, which in itself can be determined by your pension savings. So, it's good to hear that retirement incomes have just hit a 33-month high, as a record number of people turn to personal pensions and their contributions continue to rise.

Ongoing improvement

The research, as contained in the latest Moneyfacts Personal Pension and Annuity Trends Treasury Report, shows that things have improved for retirees for the second consecutive quarter, with the average retirement income (based on someone saving into a personal pension and then buying an annuity) having risen by 5.2% during the first three months of the year, and by almost 15% compared with this time a year ago.

Happily, average incomes are now at their highest level since July 2014, which could add hundreds or even thousands of pounds to someone's retirement earnings. The improvement has been driven by strong pension fund returns and higher annuity rates, and comes at a time when both personal pension membership and contributions are at record highs.

The table below highlights the improvements in more detail. It shows that someone who had paid £100 per month into an average personal pension fund for the preceding 20 years would have built up a pension fund of £47,864 if they retired now, compared with £42,457 if they had retired in April 2016.

When this pension pot is converted into an annuity – which has seen average rates rise by 1.7% over the last year – it equates to an average annual retirement income of £2,273 today, compared with £2,159 at the end of last year and £1,983 in the first three months of 2016, an increase of 14.6% year-on-year.

Maturity date

Pension fund value

Annuity rate per £10K

Annual retirement income

















Source: Moneyfacts Personal Pension and Annuity Trends Treasury Report Q1 2017


Make sure you've got a pension!

This means you can now get far higher income from a typical pension fund, and it goes without saying that if you save even more into your pot, your retirement income could be even higher. So make sure you're saving!

Find out more about why you really do need a workplace pension and how you can benefit from automatic enrolment, and that way you can be sure you're making the most of your years of retirement saving. It's important to keep an eye on the performance of your chosen pension funds, too, as Richard Eagling, head of Pensions at Moneyfacts, points out:

"The record numbers saving into personal pensions and defined contribution pension schemes have placed even greater importance on the ability of funds to deliver strong performance if individuals are to generate an adequate retirement income.

"The fact that the average pension fund has now delivered positive returns in every calendar year since 2012 has arguably made it easier for individuals to accept the investment risks [of pension saving], but whether the recent enthusiasm for personal pensions and the low opt-out rates for auto-enrolment will continue should we see a sustained period of falling investment returns remains to be seen."

What next?

As annuity rates are edging up and retirement incomes are following, now could be the right time to consider an annuity. Find out more with the help of our no obligation annuity service.


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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