Online pension modelling tools risk confusing customers by providing a wide range of possible investment outcomes, research warns.
Altus Consulting took an average 42-year-old earning £29,360 with existing savings of £37,400 and pension contributions of 9.4 per cent of salary.
It found a “massive disparity” in the potential size of the pot at retirement, with the most conservative estimate at about £115,000 and the most optimistic predicting nearly £370,000.
There was also a huge variation in investment expectations, from below 1.5 per cent to over 7 per cent.
According to Altus, none of the tools – which included insurers, wealth management firms, and the Money Advice Service – considered income options other than an annuity. Expected retirement incomes ranged from £10,000 a year after taking a lump sum of just over £36,000, up to £25,000 a year after taking a lump sum of nearly £60,000.
Altus consultant Richard Phillips says: “Our own independent research has brought this troubling issue to our attention. The lack of standardisation in this area makes the already complicated world of pension savings a mine field for the average person.
“I would prefer to see tools concentrate on giving guidance on how much people should be saving now to meet their desired pension goals rather than speculating wildly on how much or how little a pension pot might be worth in 25 years time.”