Pension assets up for second time to £418bn

Published on Sunday 24 May 2009 21:50

TOTAL defined contribution pension assets have increased for the second month in a row, rising 10 per cent in April to £418 billion.

A report by the Aon Defined Contribution (DC) Pension Tracker claimed that the increase was due to a recent "bullish performance" by global equity markets.

But pension pots still have a long way to go to recoup the losses sustained during the credit crunch.

The tracker estimates that a further 32 per cent increase is required to bring DC assets back to their September 2007 value of 550bn.

Helen Dowsey, principal at Aon Consulting, said: "Global stock markets have seen one of the strongest rallies ever over the last month which has had a positive effect on the projected retirement income for UK retirees.

"Unfortunately because annuity rates are still low this has wiped out some of the investment gain."

She added: "However, given DC pension pots have fallen dramatically since the beginning of the credit crunch it is far too early to say we are witnessing a recovery as yet."

The report also calculated that a worker retiring on their 65th birthday in January this year would have received 266 less a year than someone who worked their final shift in April, due to the previous volatility of the equity markets.