The FTSE 100 index has reached a new record high, handing millions of savers and pension holders a huge financial shot-in-the-arm.

It has soared to 6958.89, beating the previous high of 6950.6 which was set during the dot.com boom of 1999.

And financial analysts are predicting that the record level would continue to climb, possibly peaking at an extraordinary 7500 by the end of next year.

The FTSE eventually closed Tuesday on 6949.63, above its previous record close of 6930 on December 30, 1999.

The soaring value of shares provides a major boost to savers and pension holders.

Chancellor of the Exchequer George Osborne welcomed the news by posting on Twitter: “FTSE 100 at record high- good for pensions & savers. Comes on top of record low inflation & record high employment. #LongTermEconomicPlan”

Meanwhile, pensions analyst Dr Ros Altmann commented: “Savers have had a really tough time in recent years, and with interest rates so low many investors are desperate for income.

“Pension funds will benefit from rising share prices and now that the Government has changed the rules so you aren’t forced to buy an annuity, you can enjoy further gains in future rather than locking in at today’s ultra low interest rates.”