PENSIONERS called for a “concerted campaign” alongside workers yesterday after a report showed that thousands of pounds can be lopped off future pensions due to “market volatility.”
Research by the Trade Union Congress (TUC) revealed that workers could be £5,000 a year poorer if they retire after a bad year for pension-fund investments rather than a good year. TUC general secretary Frances O’Grady said: “Someone who has saved all their working life should not have to play roulette with their pension fund.
“But if their retirement lands on a bad year, market volatility could leave them with a much poorer standard of living for the rest of their life.”
Analysis of historic investment returns by the independent Pensions Policy Institute found that a pension saver’s pot size can vary by up to 40 per cent even if they had contributed for the same period. This can mean a difference of as much as £5,000 a year for life for a man on median earnings who has been in a defined contribution scheme for 40 years.
Jan Shortt, general secretary of Britain’s largest pensioners’ campaign group, the National Pensioners’ Convention, said: “This report comes off the back of another event more worrying, which showed the UK state pension was among the worst in the western world.
“Millions of today’s workers are likely to find that the amount they have to live on in retirement simply isn’t anywhere near what they had hoped, and the real reason for that is because the state pension is so low.
“Even for those with decades of contributions, the basic state pension is just £122 a week — and millions of older women get only 60 per cent of that.
“That’s why a concerted campaign is needed by both workers and pensioners to improve the state pension as a matter of urgency.”