Personal pension returns rebound in Q2 2020

The average personal pension fund returned 13.3 per cent in Q2 2020 after seeing returns of -15.2 per cent in Q1, according to Moneyfacts.

Data from the latest Moneyfacts UK Personal Pension Trends Treasury Report revealed that the return in Q2 2020 was the best average quarterly performance since Q3 2009.

The average performance of -15.2 per cent recorded in Q1 2020 was the worst quarterly performance on record as returns were hit by the Covid-19 crisis.

Despite the recovery in Q2, the average overall values of personal pensions remained 4.4 per cent lower than at the start of last year.

“After the sharp stock market falls in March 2020, regulators such as the Financial Conduct Authority and The Pensions Regulator were quick to urge pension savers to keep calm and not rush into any decisions about their pensions,” commented Moneyfacts head of pensions, Richard Eagling.

“The fear was that knee-jerk reactions such as changing investment strategies or making withdrawals at an unfavourable time could see individuals compound their losses and damage their long-term retirement prospects.

“Indeed, as the latest pension fund returns clearly show, those individuals that took such action may have missed out on rising pension values as the market recovered.”

The Moneyfacts report, however, found the annuity market “remained subdued”.

The average standard annuity income for an individual aged 65 rose by 0.7 per cent in Q2 2020, meaning that the average annuity income is 5.3 per cent lower than at the start of the year.

    Share Story:

Recent Stories


Climate Investing
Laura Blows speaks to Aled Jones, Head of Sustainable Investing for Europe at FTSE Russell, and Adam Matthews, Director of Ethics and Engagement for the Church of England Pensions Board, about the role of climate investing within a pension fund portfolio.

Managing volatility
In the latest Pensions Age podcast, Laura Blows speaks to Cambridge Associates head of European pension practice, Alex Koriath, about the Covid-related market volatility and how pension funds can prepare for the challenges ahead

De-risking options for pension schemes
In this latest Pensions Age podcast, Linklaters' Sarah Parkin talks to Laura Blows about the wide range of choice available to pensions schemes for the partial, or full, removal of their risks

Risk transfer opportunities
Laura Blows speaks to Lisa Purdy, Head of Fiduciary Distribution at Legal & General Investment Management and Gavin Smith, Pricing and Execution Director - UK PRT at Legal & General, about the impact of the recent market volatility on the bulk annuity and risk transfer market and the potential opportunities for the future

Bulk annuities during coronavirus
Laura Blows speaks to Just business development manager Prash Mehta about the impact of coronavirus on transactions