The nation’s workforce has been encouraged not to panic after reports indicated that billions of pounds have been wiped off retirement schemes by the credit crisis over the past three months.
Nigel Peaple, policy director at the National Association of Pension Funds, insisted the short-term volatility of current market conditions would not affect future pension payouts.
“The market shifts over the last few weeks should not have affected the ability of pension funds to pay benefits,” Peaple told Personnel Today. “Pension funds invest in a wide range of assets, and over the last few years, they have been reducing their exposure to equities.”
Peaple insisted employees should continue to treat saving in a workplace pension seriously.
“Pension fund trustees set their investment strategies according to long-term liabilities, not these short-term market moves – so don’t panic,” he said.
A report released by financial services firm Morgan Stanley this week showed how falling stock markets have increased pension deficits by £40bn in the past three months across 300 of the UK’s largest companies.
Meanwhile, the Pension Protection Fund, which serves as an insurance scheme for pensions, estimated that recent struggles have wiped out all its financial gains over the past four-and-a-half years.