Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“Consumers’ plans for putting money into their pension may have been disrupted by the Coronavirus pandemic, so it’s good to see positive returns on most fund sectors during the last quarter. Due to a combination of pension fund growth and a rise to annuity rates, there has been a notable improvement to the average retirement income during Q2 2021. Those who saved £100 gross per month for 20 years into a personal pension would have built a pot of £53,378 on average and taking an annuity at age 65 would result in a yearly income of £2,273. This has risen from Q2 2020 where the pot stood at £46,318 and the yearly income at £1,875.

“Seeking advice to keep on top of volatility in the stock market is always wise, but so is discussing any concerns about having enough for a comfortable retirement and the product options available. A recent study from LV= revealed not all consumers know about different products at retirement and worryingly, some are unaware of how stock market volatility can impact their pension pot. Making a rash decision to switch funds without good advice during an unsettled period could result in missing out on any potential fund recovery. Choosing any new sector without guidance can be unwise as past performance is no guarantee for future returns.

“The age in which consumers are permitted to access their pot under pension freedom rules will rise to 57 by 2028 so it is important consumers understand how this will impact them and what changes to saving for retirement they can make right now. Those who feel they may fail to accumulate sufficient pension savings to achieve the retirement income they desire would be wise to seek advice on whether they should delay or consider other methods of plugging the gap.”