The research shows that at the early stages of the credit crunch in September 2007, the value of DC pension assets stood at £550 billion, but 16 months later at the end of January 2009, the value stood at £410 billion, according to an Aon press release.
DC pensions are becoming increasing popular to U.K. employers as 80% of open private sector pension schemes are DC based. The press release said that for DC schemes the average employer contribution is 7.3% and the average employee contribution is 4.4% of pensionable pay.
While the hit to DC pensions is bad news for those on the verge of retirement, younger pensioners may have time to make up for the losses. Helen Dowsey, principal at Aon Consulting, urged that both employers and employees “maintain the long-term view.”