The majority of UK adults admitted they only have moderate expectations for their pension returns, and prioritise stability in their retirement savings over higher-risk investments, a new survey by PensionBee has revealed.
The consumer retirement market service’s survey, of both workplace and private pensions, included 1,000 UK residents aged 18-66. It found that 34% of respondents believe a realistic annual return on their pension lies between 5% and 7%, with the same number of those aged 18-54 and 37% of those 55 and over saying this.
Meanwhile, only 8% expect returns exceeding 10% and 59% expect returns of over 5%. This is more prevalent among those aged 18-54, with 60% holding this view, while 55% of respondents aged 55 said the same.
Nearly one-third (32%) are willing to tolerate up to a 5% variation in their pension value within a year, echoed by 32% of younger participants and 31% of those aged 55 and above. However, 32% of the older demographic prefer complete stability.
In terms of how frequently people review their pension performance, 17% of all respondents review their pensions monthly while 30% assess their pensions once a year. This is more prevalent among younger participants (31%) compared to older ones (28%).
Additionally, 23% of older respondents have greater trust in their pension providers to monitor performance, compared to only 13% of those aged 18-54.
Clare Reilly, chief engagement officer at PensionBee, said: “These findings underscore the delicate balance that many savers are trying to achieve between growth and stability in their pension investments. It’s important to remember that the returns savers see are influenced by market fluctuations, and periods of both growth and decline are to be expected.
“While the returns we see today may not be replicated year after year, over the long term, pension investments are designed to smooth out these ups and downs. The goal is to consistently outpace inflation and provide the returns that meet savers’ long-term expectations, ensuring they can enjoy a happy retirement.”
