Sharp fall in pension funds
The value of defined pension contributions has fallen by nearly a third in the past 12 months due to the financial chaos on the stock markets.
According to research by pensions consultancy Aon, the value of funds has dropped from £552bn to £395bn over the last year.
The drop in value will be most serious for those closest to retirement, said Aon, and those affected may have to delay plans for a number of years.
"It may appear a double blow to workers that not only are they facing more of a struggle to make ends meet, but the economic turmoil is also seemingly eating into the money they have been putting aside for retirement," said Helen Dowsey of Aon Consulting.
"However, most workers will have the fortune of time on their side as their retirement will be many years away, enough time to weather the current storm."
Around 4m people in the UK have such schemes, which have become more popular over the past decade as companies turn away from offering a guaranteed income through final salary schemes.Post Date: October 28th, 2008