Thursday, April 24, 2008

Falling pensions

Nearly one in three IFAs expects investors to be saving less into their pensions this year as stock market volatility and the credit crunch hit home, according to new research from global insurance and financial services organisation MetLife Europe.

The research also revealed that the average predicted reduction in pension investment is a substantial 21 per cent.

The analysis shows that the FTSE 100 has lost around 7.6 per cent since the start of 2008 and at one point in mid-March was more than 16 per cent lower than its 2008 starting level of 6,456.9.

Dominic Grinstead, strategic development and marketing director at MetLife, says, ‘Stock market volatility has been one of the biggest concerns in the past year, with the impact of the credit crunch beginning in 2007 adding to the pressure on people’s finances.

‘Market volatility looks set to continue throughout 2008, and this appears to be making some pension savers reconsider their decision to invest. However, if they reduce investment in pensions because of stock market volatility, they will see retirement income fall.’