FE Trustnet asked five leading experts what they thought of these changes.
Adrian Shandley, managing director of Premier Wealth Management
"I do agree that these projection rates needed to be addressed as they were too high. However, this reduction in rates should have been done in 2005 and 2006 when markets were in better shape."
"We are now in a very low-growth environment, so bringing them down now is like bolting the stable door after the horse has left."
"Choosing to reduce growth-rate projection now is barking mad."
Danny Cox, head of advice at Hargreaves Lansdown
"I think this change makes sense in all honesty. The current maximum annuity rate is 9 per cent which, with a very low-growth economic environment, is pretty unrealistic. "However, investors need to remember that these are only projections as no-one knows what might be around the corner. These projections are designed for investors to see how much you get in your retirement and if you are paying enough into your pension."
"As long as investors look at them in this light and keep regularly reviewing their pension then it shouldn’t really matter."
Jane Heyman, chartered financial planner at McCarthy Taylor
"I guess my concern with the change in projections is how it will affect people who are wanting to fund a pension. On the back of these changes, we don’t want people to be put off putting money into a pension scheme."
"It will help managing the expectations of a client’s pension and I can see why they have done it. However, you need to see it from the other side of the fence."
"These illustrations are just a projection; they can never be fully accurate. It also doesn’t account for the timing of when people buy into the pension schemes, because they could be buying in a rising or falling market."
Andrew Reeves, director of The Investment Coach
"These changes in the annuity projections seem quite sensible to me."
"The growth rates of certain poorly performing funds needed to be addressed, so I think it was a necessary step."
"However, it may put some investors off traditional pension schemes. These illustrations are not a sales tool, but they are normally a very accurate projection of how much money you will get during your retirement."
Dr Ros Altmann, director general at Saga
"For far too long, pension investors have been given a false sense of security by forecasts that suggested they would receive much larger pensions than were realistic." "We know that pension funds have simply not been able to deliver these kinds of returns, net of charges, so we need to be more realistic."
"But why is this only changing in 2014?"