Yesterday’s even-worse-than-predicted GDP figures could spell more agony for British pensioners and those nearing retirement, warns the boss of the world's largest independent financial advisory firm.

The latest data reveals that the economy contracted at a quarter-on-quarter rate of 0.7 per cent, demonstrating that the UK economy has now shrunk for three consecutive quarters.

The news is fuelling speculation that the Bank of England will announce a further round of Quantitative Easing (QE), which is, another hammer-blow for pensions.

Nigel Green, chief executive of the deVere Group, says: “These GDP figures highlight the depth of the UK recession, yet it is highly unlikely that the Bank of England’s Monetary Policy Committee will move away from its ‘Plan A’, which is to pump money into the economy whenever it falters.

“As such, we forecast that the Bank of England will expand its QE programme by an additional £50 billion when the current asset purchases – also £50 billion- are completed in November.

“And more QE means more misery for retirees.”

Money by Ian Britton

Money by Ian

He continues: “QE can cripple pension funds as it can fuel inflation, meaning more bad news for those who’ve already seen their funds dwindle due to high living costs and low interest rates.

“In addition, another round of QE, like the ones before, will make the vast majority of those who are nearing retirement now, permanently poorer as it will further slash annuities – which are already at historic lows.”

Annuities are based on gilts, meaning the more expensive they are, the less income investors will receive in return for their pension fund.

“By damaging pensions and pension funds, and increasing inflation, QE, a supposed ‘stimulus’, could in fact have the opposite effect of what it is intended to do. Quite clearly, it could hinder economic growth by impoverishing millions of British retirees,” adds Mr Green.

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