Nearly £157bn has been wiped off of the value of defined contribution (DC) pension funds in the past year.
In October 2007, the value of DC pension assets stood at just over £552bn, however by October this year, the value had dropped by just over a quarter (28%) to approximately £395bn. This is despite employers and employees paying £6.7bn worth of contributions into DC pension funds in total over the same period, according to figures from Aon Consulting.
Helen Dowsey, principal in the benefit solutions division at Aon Consulting, said: “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. 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.”