Nearly six in 10 (59 per cent) UK adults expect an annual return of over 5 per cent on their pension investments, with this expectation being more prevalent for those aged 18-54 with 60 per cent holding this view, research from PensionBee has found.

However, 55 per cent of those aged 55 and over shared the expectation, despite higher returns being less realistic for this age group.

PensionBee said this highlighted a potential gap in understanding the likely returns for older individuals nearing retirement.

The survey also found 34 per cent of respondents believe a realistic annual return on their pension lies between 5 per cent and 7 per cent.

This expectation was consistent across age groups, with 34 per cent of those aged between 18 and 54 and 37 per cent of those aged 55 and over suggesting the same.

However, 8 per cent of respondents expected returns exceeding 10 per cent, suggesting measured hopes for long-term growth but at a rate that should outperform typical saving accounts’ interest rates.

Meanwhile, regarding short-term fluctuations, 32 per cent of respondents were willing to tolerate up to a 5 per cent variation in their pension value within a year, with 32 per cent of younger participants and 31 per cent of those aged 55 and above echoing this sentiment.

Despite this, the findings also pointed out that a “significant” amount (32 per cent) of the older demographic preferred complete stability, indicating a more conservative attitude toward pension management as retirement approaches.

Furthermore, when considering how frequently people review their pension performance, the survey revealed that 30 per cent of respondents said they assess their pensions once a year.

In particular, 31 per cent of younger participants said they review their pension investments annually, while 28 per cent of older respondents said the same.

In addition to this, 17 per cent of all respondents said they review their pensions regularly.

PensionBee said that older respondents demonstrated greater trust in their pension providers, with 23 per cent relying on them to monitor performance, compared to only 13 per cent of those aged 18-54.

Commenting on the appointment, PensionBee chief engagement officer, Clare Reilly, 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.”

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