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Pension benefits to be hurt by credit crunch
13 October 2008 16:09
pension funds could take serious damage during the credit crunch, an expert on finance has warned.
Defined benefit schemes are likely to be hit the hardest with the current unpredictable nature of the markets exacerbating the situation, according to Tom McPhail, head of pensions at Hargreave Lansdown.
Those in defined pension schemes could also face problems if their funds have not been de-risked and they are nearing retirement.
Mr McPhail told citywire.co.uk that there have been some wild swings in scheme valuations, while asset values have also plunged.
He added that those with pension pots of less than £50,000 would face tough retirement circumstances, with many having to adjust their lifestyles after they finish work.
A recent annual survey by NAPF of more than 500 pension schemes found that almost 20 per cent said they would level down via lower contributions or switching new employees to personal accounts from 2012 onwards.
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