The industry regulator, the Financial Services Authority is to review projection rates in June this year. The FSA committed itself to reviewing projected rates of return every four years and the next review is almost upon us.
Currently, when pension and investment companies send you quotations or annual statements they include details of what you might get back. For pensions and Friendly Society policies, returns are projected at 5%, 7% and 9%. For investments and insurance contracts with an investment element, they are projected at 4%, 6% and 8%.
Our view
With stock market returns so poor it is likely that the Financial Services Authority will lower the projected rates for future growth. If this happens, projected returns will be more realistic but could mean that premiums go up if you need to produce a set amount of money in a set number of years.
Try our range of calculators to help you get a better idea of waht returns you may receive given various assumed grwoth rates.