Britons who have been diligently putting money aside into a pension could be in for a nasty shock when they eventually reach retirement age, with new research warning that pension returns have plummeted over the past decade.
The research by Moneyfacts has found that a worker retiring today could be 50 per cent worse off than someone who paid the same premiums over the same period but retired 10 years ago.
In July 1996, it calculated, a man retiring at 65 who had put aside £500 a year into a personal pension for 15 years would on average have built up a pension pot of £25,840.
But someone retiring today would only have a comparable pot of £12,306, representing a 52 per cent fall in the average pension payout.
The average 20-year with-profits pension had seen payouts fall 57 per cent and 25-year ones had suffered a 53 per cent slump, the survey said.
Back in July 1996 a £100,000 pension fund would have given a 65-year-old man an annuity of £11,390.
Today that would have dropped to £6,860, a fall of almost 40 per cent, said Moneyfacts.
Richard Eagling, editor of Investment, Life & Pensions Moneyfacts, said: "Many pension savers have enjoyed better returns over the last three years but it is vital that they do not become complacent.
"The fact remains that today's pensioners are facing a longer retirement with pension pots half the size of those fortunate enough to have retired a decade ago.
"These latest figures only serve as a powerful reminder that securing a comfortable retirement will only be possible for those individuals who actively monitor and manage their own pension provision," he added.