A new report has revealed that pension fund performance weakened during the second quarter of 2017.

The average pension fund growth during the quarter was just 1.4% compared to 4% in the first quarter, according to the report by Moneyfacts. Nearly three in 10 pension funds failed to produce any growth during the quarter.

The downturn coincided with the Government’s decision to bring forward the rise in state pension age by seven years. The move, which was announced in July, will see the state pension age rise from 67 to 68 between 2037 and 2039.

Annual retirement income for someone saving into a personal pension and taking an annuity at 65 also dropped by 1.9% during the second quarter. Compared to April 2017, annual retirement income has dropped from £2,273 to £2,229.

Moneyfacts’ latest report also found that there was a significant rise in the number of pension funds which did not produce any growth.

Some 29% of pension funds did not produce any growth in the second quarter, compared to just 5% earlier this year. Despite this, the average pension fund has grown by 5.6%

The report also found that annuity rates fell during the second quarter, despite around 80,000 annuities being sold each year.

In the standard market, the average annual income payable from a level without guarantee for a 65-year-old fell by 2.1% at the £10,000 purchase point and by 1.7% at the £50,000 purchase point. However, average annual annuity income is still 3.1% higher compared to last year.

Providers’ open annuity rates also increased during the second quarter according to the latest report, rising from 12% to 13.9%.

The same can’t be said for the enhanced annuity market though, where average annual income from an enhanced annuity fell by between 0.8% and 1.2%. Income in the enhanced annuity market is down by nearly 1.5% compared.