The majority of UK adults have stated that they have moderate expectations for their pension returns, a new survey by PensionBee has revealed.

The research by the consumer retirement firm also found that the majority also prioritise stability in their retirement savings over higher-risk investments.

The findings show that over one third (34%) of respondents believe a realistic annual return on their pension lies between 5% and 7%.

This expectation is consistent across seperate age groups, with 34% of those aged 18-54 aiming for this return amount and 37% of those aged 55 and over expecting the same.

Just 8% of respondents expected returns of over 10%, which suggests "measured hopes for long-term growth", PensionBee said, but at a rate that should outperform typical interest rates on savings accounts.

Almost three in five (59%) expected an annual return of over 5% on their pension investments, and this expectation was more prevalent in the 18-54 age bracket with 60% holding this view.

However, 55% of respondents aged 55 and over shared the same expectation, despite higher returns being less realistic for this age group.

PensionBee said that these figures highlight a potential gap in understanding about the likely returns for older individuals nearing retirement.

Chief engagement officer at PensionBee, Clare Reilly, said: "These findings underscore the delicate balance that many savers are trying to achieve between growth and stability in their pension investments. It’s important to remember that the returns savers see are influenced by market fluctuations, and periods of both growth and decline are to be expected."

The survey also found that in terms of pension performance review, 30% of respondents said they assess their pension once a year. This was slightly more prevalent among younger participants (31%) compared to their older counterparts (28%).

Furthermore, almost one in five (17%) of all respondents said they review their pensions monthly.

Reilly added: "While the returns we see today may not be replicated year after year, over the long term, pension investments are designed to smooth out these ups and downs. The goal is to consistently outpace inflation and provide the returns that meet savers' long-term expectations, ensuring they can enjoy a happy retirement."

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