Recession hits value of pension fund assets

In 2008, the value of self-administered pension funds' assets dropped to £928 billion as stock markets fell at the start of the recession, says a chapter of 'Pension Trends' published by the Office for National Statistics.

The value of these assets was £1,093 billion in 2007.

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 £58.6 billion, down sharply from £71.8 billion in 2006. This is the biggest fall since the start of the series in 1984. 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 £1.5 billion in 2008 compared with £9.7 billion 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 £48.9 billion in 2008, down from £52.1 billion in 2006.