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Have long-term low rates skewed investment projections?


‘It is vitally important they are realistic, understandable and consistent’
When people invest in a pension or other financial products they are given illustrative projections as to how their money could grow over time.
For pensions specifically, clients get three which represent high, low, and intermediate estimates based on the economic environment and outlook.
But interest rates have been dragging along the bottom since the global financial crisis. This decade of low return will have affected the long-term growth potential of pensions and investments – but do the illustrations reflect that?
Realistic assessment
Steven Cameron, pensions director at Aegon, told
International Adviser that the intermediate rate is capped by the Financial Conduct Authority, and is currently at 5%. ....

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