Hundreds of thousands of savers have had their retirement hopes dashed by the banking crisis and a crash in payouts on with-profits pensions. Those reaching pension age now are getting £4,975 less a year than an identical saver who retired five years ago, Money Mail research has revealed. They have been hit by a toxic combination of plunging payouts on with-profits pensions, and a fall in annuity rates — which turn pension savings into an income for life.

The worst-performing fund, Britannic, has delivered a payout of £73,612 for someone who has saved £200 a month for 20 years. This buys an annual income of just £3,861 for a 65-year-old man retiring today. But in 2007 someone who had saved the same amount over 20 years would have received a payout of £142,884. From this they could have bought an annual income of £8,786 — so today’s pensioner faces, in effect, a 56 per cent pension cut.

Although Britannic is by far the worst performer, it’s a similar story across the board with all the other giant insurers. In the past five years payouts from similar policies have dropped by as much as a third while annuity rates have fallen by 15  per cent. It highlights the terrible legacy of with-profits pensions, which were sold in a....Read more here--: With-profits pensions: Retirement plans shattered by plunging payouts