The writer is a financial journalist and author of ‘More: The 10,000-Year Rise of the World Economy’

Three linked questions are at the heart of investment decisions today. What is the risk-free rate of return that investors can now secure? What future return is it reasonable to expect? And what is the prudent level to take or “draw down” from a pension fund or saving scheme? The answers to those questions affect everyone from charitable foundations through giant pension funds to ordinary 60-year-olds contemplating how best to use their pension pot.

None of these questions is easy to answer. Take the risk-free rate. This could be defined as the return on short-term bank deposits (virtually zero at the time of writing), the yield on two-year Treasury bonds (0.6 per cent) or 10-year bonds (1.44 per cent).