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| Version 0 | Version 1 |
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| Recession hits private pensions | Recession hits private pensions |
| (40 minutes later) | |
| The value of private pension savings of 3.7 million people in the UK has been severely damaged by the credit crunch and the recession. | The value of private pension savings of 3.7 million people in the UK has been severely damaged by the credit crunch and the recession. |
| Pension consultants Aon calculate that, since the beginning of October 2007, their defined contribution (DC) savings pots have shrunk by 29%. | Pension consultants Aon calculate that, since the beginning of October 2007, their defined contribution (DC) savings pots have shrunk by 29%. |
| Aon says the combined pension pots have shrunk by £161bn, from £552bn to £391bn over the 17-month period. | Aon says the combined pension pots have shrunk by £161bn, from £552bn to £391bn over the 17-month period. |
| The fall is largely due to the dramatic collapse in share prices. | |
| 'Horrible erosion' | 'Horrible erosion' |
| Aon's research for the BBC covers both individual private pension plans, company DC schemes, and additional voluntary contributions (AVCs) made by members of final-salary schemes. | Aon's research for the BBC covers both individual private pension plans, company DC schemes, and additional voluntary contributions (AVCs) made by members of final-salary schemes. |
| "People have been putting money into schemes in those 17 months, so the underlying investment performance of most savers was worse than a fall of 29%," said the BBC's business editor Robert Peston. | "People have been putting money into schemes in those 17 months, so the underlying investment performance of most savers was worse than a fall of 29%," said the BBC's business editor Robert Peston. |
| "Even so, that's a pretty horrible erosion in the value of millions of savers' pensions." | "Even so, that's a pretty horrible erosion in the value of millions of savers' pensions." |
| Malcolm McLean, chief executive of the Pensions Advisory Service, described the figures as "very disappointing but not entirely surprising". | Malcolm McLean, chief executive of the Pensions Advisory Service, described the figures as "very disappointing but not entirely surprising". |
| He also pointed out that new contributions would have suffered, and would continue to suffer, during the recession. | He also pointed out that new contributions would have suffered, and would continue to suffer, during the recession. |
| "People are backing away from pensions as they struggle to live from day to day. Many people are not planning for the future, but you can see why. | "People are backing away from pensions as they struggle to live from day to day. Many people are not planning for the future, but you can see why. |
| "This is a worrying trend as people are living longer and spending many more years in retirement. Many won't be living on an adequate income," he added. | "This is a worrying trend as people are living longer and spending many more years in retirement. Many won't be living on an adequate income," he added. |
| Big deficits | Big deficits |
| The rapidly widening deficits of final-salary schemes are well known and are measured by the Pension Protection Fund (PPF) each month. | The rapidly widening deficits of final-salary schemes are well known and are measured by the Pension Protection Fund (PPF) each month. |
| Its most recent estimate put the combined deficit of nearly 7,800 final-salary schemes in the private sector at £219bn in February, with 91% of schemes now in deficit. | Its most recent estimate put the combined deficit of nearly 7,800 final-salary schemes in the private sector at £219bn in February, with 91% of schemes now in deficit. |
| Aon estimates that the final-salary schemes of the top 200 companies in the private sector now have a deficit between them of £19.4bn. | Aon estimates that the final-salary schemes of the top 200 companies in the private sector now have a deficit between them of £19.4bn. |
| "The picture that emerges is of growing financial strain on private-sector companies that offer final salary pension schemes and of hideous losses for 3.7m savers in direct contribution pension schemes," said Mr Peston. | "The picture that emerges is of growing financial strain on private-sector companies that offer final salary pension schemes and of hideous losses for 3.7m savers in direct contribution pension schemes," said Mr Peston. |