WORKERS have seen the value of their pension pots rise by 10% during the past month on the back of a strong stock market rally, research showed today.
UK workers now collectively have assets worth £418bn held in defined contribution pension schemes, according to Aon Consulting.
But, despite the value of the schemes increasing for the second month in a row during May, a further 32% jump is needed just to bring the assets back to the level they were at in September, 2007.
Unlike final salary schemes, where pensions are based on the number of years a worker has belonged to a scheme and their salary immediately before they retire, under defined contribution ones the employer only guarantees how much they will pay into the pension pot.
This leaves the individual, rather than the company, having to shoulder the risk of investment volatility and increased life expectancy.
