Pensions saving to become popular again - Pensions - News - Moneyfacts

News News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Pensions saving to become popular again

Pensions saving to become popular again

Category: Pensions

Updated: 25/02/2009
First Published: 25/02/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The sharp fall in property values and reported rise in home repossessions is likely to change the once growing perception of 'my house is my pension fund' and drive people back into the pension savings market once the economy starts to rebuild, says a report from actuarial firm, Watson Wyatt.

The report, reality bites, looked at defined contribution (sometimes called money purchase) pension schemes where the employer and possibly the employee make monthly contributions for a pension on retirement and found that these arrangements had "suffered unprecedented stress" due to the present economic conditions. This has been a huge wake-up-call for contributors who have seen their fund values fall and will ultimately force pension providers to "sharpen up their game". The report predicts, in the longer term this will lead to "stronger, better quality products".

Under such schemes the employer may guarantee the amount of contribution - hence the term defined contribution. However, employees might be encouraged to top up the pension with their own contributions. The fund is usually invested in equities and property which, as we all know, can go down as well as up. Therefore, the level of the eventual fund is not guaranteed and the final results will depend upon the investment performance. In short, the onus is on you, to regularly check that your fund will be adequate.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Have you lost track of your pensions?

The changing nature of the jobs market means it’s highly likely that you’ve got more than one pension pot, but the question is, do you know where they all are? According to research from Aegon, many people don’t.

Grandparents missing out on pension protection

Grandparents who give up work to take care of their grandchildren could be missing out on valuable state pension rights. So, if you're a grandparent taking care of a little one, make sure you’re building up all of the pension that you deserve.

Setting goals could boost your pension pot by £30K

Setting goals can be the key to success in many areas of life, helping motivate you to achieve anything from career progression to building up that house deposit - and if you have goals set for retirement, you could boost your pension by £30,000.