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Pension fund assets plunge in recession

The value of self-administered pension fund assets dropped 15 per cent in 2008 to £928bn, according to the Office for National Statistics.

ONS data shows that as stock markets fell at the start of the recession the value of these assets dropped from £1.09trn in 2007 to £928m.

In 2008, 59 per cent of investment by self-administered pension funds was in corporate securities.

The composition of funds’ investments in corporate securities changed between 1986 and 2008, with a smaller proportion of the total invested in shares and a larger proportion in mutual funds and bonds.

In 2008, the total income of self-administered pension funds was £58.6bn, down 18 per cent from £71.8 billion in 2006. This is the biggest fall since 1984.

The ONS says it was driven by a reduction in employers’ special contributions and a drop in transfers between pension funds:

Employers’ special contributions were worth £6.8 billion in 2008, compared with £13.2 billion in 2006.

Transfers into pension funds were worth £1.5bn in 2008 compared with £9.7bn in 2006.

Expenditure of self-administered pension funds was also lower in 2008 than in 2006, but the decrease was less than the fall in income.

Total expenditure was £48.9bn in 2008, down from £52.1bn in 2006.

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