Payouts on personal pensions have halved in the past decade, a survey shows.
Someone retiring today could be more than 50 percent worse off than a pensioner who made the same premium contributions, but reached retirement 10 years ago, according to Investment, Life & Pensions Moneyfacts.
It said the figures highlighted the worrying extent to which personal pension returns have plummeted for those trying to take steps to save for a comfortable retirement.
Richard Eagling, editor of Investment, Life & Pensions Moneyfacts, attributed the findings to poorer stock market conditions.
We've entered a period where lower returns are the norm, he told Reuters. Around 20 years ago, people were enjoying exceptional returns, but those who started saving after that missed out on those.
He believed that lower stock market returns would continue, and hoped the statistics would act as a wake up call to consumers.
Many pension savers may have enjoyed better returns over the last three years but it is vital that they do not become complacent, he said.
Today's pensioners are facing a longer retirement with pension pots half the size of those fortunate enough to have retired a decade ago.
These latest figures should serve as a powerful reminder that securing a comfortable retirement will only be possible for those individuals who actively monitor and manage their own pension provision.
The average 20 year with profits pension payout has fallen 57 percent from 61,592 pounds in 1996 to 26,168 pounds today, while the average 25 year value has plummeted 53 percent from 120,239 to 55,992 pounds.
For shorter term savers, the picture is almost as bleak.
In July 1996, a male retiring at age 65, having contributed a gross annual premium of 500 pounds into a personal pension for 15 years, would, on average, have built up a with profits pension fund worth 25,840 pounds or a unit linked fund worth 19,709 pounds.
However, the same individual retiring today, after paying identical annual premiums, would be left much worse off. The average with profits pension pot would total just 12,306 pounds, while the average unit linked pension fund would be worth just 11,696 pounds.
That represents a 52 percent fall in the average with profits pension payout over the last decade, and a 40 percent drop in the average unit linked pension.
Eagling said the challenge facing today's pension savers was compounded by falling annuity rates.
A decade ago, a pension fund of 100,000 pounds would have bought a man aged 65 an annual annuity of 11,390 pounds, if he opted for the best available level standard annuity. Today, the same pension pot would yield a top annual income of just 6,860 pounds a fall of almost 40 percent.