The value of UK defined contribution (DC) pension plans fell by £18 billion in October 2009.
A report from Aon Consulting showed that the sector suffered due to continuing volatility in the global equity markets and wiped out some of the gains made over recent months.
DC pensions are generally heavily exposed to stocks, meaning that market rises and falls impact on the overall value of plans.
The sector has been hit by the near-unprecedented market turbulence which has resulted from the credit crunch.
For example, the FTSE 100 lost around 35 per cent of its value in 2008, before gaining again during 2009.
The trends have led to some savers with DC plans retiring on a lower-than-expected income.
This could in turn have resulted in other income sources, such as equity release plans, becoming more popular.
Richard Strachan, senior consultant at Aon, said: "While October finished slightly down compared to September, the general trend for the UK’s DC pension savings is on the up.
"There is still significant volatility, though, and it is vital for workers to take an active interest in their retirement savings, evaluating whether they are invested in the right funds for them, and to have some very clear goals and a strategy to achieve them."
Posted by Richard Planner
