Investors are likely to see a recovery in the value of their pension funds, following the government’s bank rescue plan, but the annuity rates that determine their retirement income look set to fall.

Pensions analysts yesterday forecast that the suspension of dividends by Royal Bank of Scotland, Lloyds TSB, HBOS and Barclays will not have a significant impact on long-term investment returns, and said corporate bond prices are likely to rally now that the terms of the bank bail-outs are known.