Pension incomes have fallen by 14% compared with the start of the year due to market turmoil.
Those who have pension incomes bought from retirement savings have seen a significant drop in their share and annuity rates. This means that a 65 year old with a £100,000 pension pot would buy a retirement income that was £926 lower today than at the beginning of the year.
The research from Hargreaves Lansdown found that the recent market crash is having a detrimental effect on UK personal pensions.
Since the beginning of the year a personal pension pot has fallen to £91,840 and the annuity income has fallen from £6,497 to £5,571 according to figures from Hargreaves Landsown.
ISAs have also been hit by the market fall. ISAs linked with shares will now be worth significantly less as the value of savings has fallen by 12.2%.
According to a price comparison website, a stocks and shares ISA worth £10,000 at the beginning of the year is now valued at £8,778.
Those who have money saved in personal pension plans who want to cash them in to buy an annual pension are suffering from the market fall.
Compare ISAs with Propertywide.
There are also a growing number of people who don’t have any pension savings at all. A quarter of over 55s have less than £500 in savings, further research from Avia found.
The typical monthly income for UK over 55 year olds has fallen from £1,1294 in June to £1,216 in September.
This is the lowest monthly income since February 2010, when over 55s had £1,250 to spend.
The number of over 55 year olds in debt is increasing, with a lack of savings or a decreasing pension pot 73% of them are concerned about the rising cost of living.
“The over-55s have seen their finances deteriorate over the last quarter as people struggle to keep up with the rising cost of living on a relatively fixed income. Said Clive Bolton, ‘at retirement’ director at Aviva.
“That almost a quarter of this age group have less than £500 in savings and 40% save nothing each month is a clear indication that this age group is struggling financially.”
Compare savings with Propertywide.