Private pensions lose £150 billion

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Private pensions lose £150 billion

Mon 13th Oct 2008

Pensioners could lose a fifth of their retirement income for good as stock market volatility has hit their funds.
According to the Daily Mail, at least £150 billion has been lost from 7.2 million money-purchase pension schemes which are linked to the stock market.
It means that this year, every such private pension has suffered a drop in value averaging £20,000.
The paper cited figures from Standard Life showing that one month ago, a 65-year-old man with a £200,000 pension fund could have expected an annual pension income of £15,480.
But now, such a person would have an annuity worth £2,000 less a year.
The 100,000 people who are about to retire could lose as much as a fifth of their income while others could work for five years more to get the same pension they would have received if they had retired in September.
On Friday, Channel 4 reported the results of an exclusive poll which found 45 per cent of people think their money is less safe now than it was a year ago.
The survey, carried out by ICM Research for the television channel, also found that one in six people have either withdrawn savings from banks or building societies or are considering it.

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