You are here: Home - Retirement - Retirement planning - News -

Average pension fund sees loss for first time since 2015

0
Written by: Paloma Kubiak
02/05/2018
Pension funds faced tough conditions in the first quarter of 2018 as they fell by an average 3.8%.

The average pension fund saw positive gains in the previous nine quarters but the decline of 3.8% means this is the first loss since Q3 2015.

According to the Moneyfacts UK personal pension trends treasury report, of the 36 ABI pension fund sectors surveyed, only two (UK Direct Property and Money Market) avoided a fall.

The heaviest losses during the quarter were suffered by Commodity/Energy (-10.4%), Global Property (-6.8%) and UK All Companies (-6.1%). Just 7% of all pension funds surveyed produced growth during the three-month period.

pensionfundgrowth

This is of particular concern as just last month, the workplace pension contribution rates increased from 1% to 3% for employees. The minimum contribution level will rise further to 8% in April 2019, with 5% coming from employees.

Richard Eagling, head of pensions at Moneyfacts, said: “A major concern is how employees will react to seeing their minimum pension contributions triple. With signs of greater volatility returning to the investment markets it will be interesting to see if this dampens enthusiasm for saving into a personal pension or workplace pension, particularly given the higher minimum contribution rates that employees are now facing.

“It could also encourage individuals to reconsider their retirement income decisions at the decumulation stage by favouring the secure income of an annuity over the greater flexibility and risks inherent in drawdown.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Barclays Blue Rewards
Barclays doubles reward offering for new and existing customers

Barclays has revamped its Blue Rewards offering, meaning new customers can receive double the incentives for a year. For existing...

Close