Page last updated at 09:53 GMT, Monday, 24 August 2009 10:53 UK

'Confidence' in state of pensions

20 notes
Pension fund values rebounded in June, figures show

Fewer requests for information about the current state of workers' pensions shows rising confidence in retirement savings, according to consultants Aon.

Requests from pension scheme members about the current value of their pension pot fell by 17% between the first and second quarter of the year.

But another pensions expert claimed the conclusion was a "huge leap".

The value of assets in defined-contribution pension funds rebounded in July owing to rising share prices.

Requests

Aon said that the number of people asking about their projected pension based on their current savings plan fell by 9% in the second quarter of the year compared with the first three months of 2009.

However, the numbers were still 36% higher than the same period the previous year.

Mark Duke, head of pensions at Towers Perrin, said that although Aon made a good point, it was a "huge leap" to suggest the figures showed confidence in pensions was rising.

He said relatively few people checked the value of their pension pot regularly, and so these were probably marginal figures.

He added that when people had checked, the downturn had led to their pension pot looking grim and so they did not want to look again too soon.

Confidence levels

The number of new workers joining schemes fell by 37% quarter-on-quarter, according to Aon's sample of 350,000 members in 35 UK pension schemes.

"If stock market performance is dictating confidence levels among savers, this would suggest a lack of understanding of the long-term nature of pension saving," said Aon Consulting's commercial director Colin Hamilton.

"Effective member communication and education has an essential role to play in explaining the long-term nature of saving for retirement and ensuring that members are well informed during periods of economic volatility so that they do not rely on equity markets to solely dictate their concerns."



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