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‘Savers overdependent on market performance’

The UK managing director of MetLife said advisers were reporting an over-reliance on strong investment markets to bolster retirement savings, and cautioned that “relying on consistently strong markets is risky”.

He said: “Stock market performance was strong in 2013 with the FTSE 100 gaining approximately 14 per cent, but it is still below the highs it achieved at the end of last century and annuity rates at around 5 per cent are about half the level they were then.”

Mr Grinstead’s comments were echoed by an online MetLife poll of 144 advisers which revealed that 60 per cent of clients needed strong market performance to meet their retirement income goals.

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Other findings included:

39 per cent of advisers regarded client inertia and not reviewing pension funds as a major risk to saving.

60 per cent of advisers believed selecting the wrong annuity could risk savings

64 per cent believed poor investment selection was the biggest risk to planning

Adviser View

David Jones, principal of Wrexham-based North Wales Independent Advice, said: “Stock market funds can be volatile and can fall as quickly as they rise. Clients approaching retirement should not be depending on their performance, and are in the wrong fund if they are at the accumulation stage.”