In a new report, commissioned by Metlife, Altmann claims this mantra has not delivered and as such a significant number of future pensioners are heading for poverty.
According to Altmann, this overwhelming trust that equities would provide stellar returns prompted successive Government’s to decimate the state pension.
She says the risks of equities have been “dangerously underestimated”.
She says: “Relying on equities to fund future pensions seemed fine for a time but has not worked in recent years. Unfortunately for future pensioners, everyone was relying on strong stock market returns.
“The Government relied on this to enable it to reduce state pensions, employers relied on this to fund the over-generous final salary pension promises and individuals in private pensions were relying on this too – although the often did not realise it.
“The risks of equity investing seem to have been dangerously underestimated.”
Bonds have outperformed equities over the past 10 years, despite assurances of significantly higher returns, according to Altmann.
She adds that there has been no planning for the inadequate level of private pensions.
She says: “The idea that equity markets might not deliver over the long term was never seriously entertained by policymakers.
“Every single equity investor was led to believe that although markets might be volatile in the short-term, over the long-run equities would deliver returns higher than gilts.
However, this may be an incorrect interpretation.”