Five years ago, someone retiring after making 15 years worth of pension contributions of £2,000 per annum would have built up a fund worth £120,000 (16 per cent per annum). Someone retiring this year after making the same 15 years worth of contributions would end up with a fund worth £102,600 (14.3 per cent per annum).

Seven years ago, 10 years contributions in the best fund would have resulted in a fund worth more than £54,300 (17.6 per cent per annum); today's best fund is worth slightly more than £42,600 (13.4 per cent per annum). Lower inflation and interest rates have brought down pension fund values in the last seven years. But in the case of with-profit pension funds, the biggest cause has been a realisation by the pension providers that they had been overpaying annual and terminal bonuses.

Survey author Eddie Hobbs says: "Bonuses were no longer reflecting the underlying value of the investments in the with-profit funds. Companies were coming under increasing criticism, in Britain especially, and the trend towards privatisation means that pension providers are also being forced by their obligation to shareholders to make sure the amounts being paid out are correct".