Pension fund values up as markets recover

THE value of the UK's defined contribution (DC) pension schemes has grown by 20 per cent in the last year, figures published yesterday show.

The total value of DC scheme assets reached 526 billion at the beginning of January, the highest level since June 2008 and up from 410bn in January last year, according to Aon Consulting's monthly DC Pension Tracker.

The figure was a 21bn improvement from November and continued the recovery from a low of 368bn last February.

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In the 16 months to the end of January 2009 the value of the UK's DC pension assets fell by a third. But Aon warned that while last year's modest stock market recovery boosted pension fund values, the growth was offset by further falls in the income paid by the annuities bought with pension funds at retirement, as insurers cut their rates on the back of falling gilt yields.