Pension savers 'unaware of stock market risks'
Pensions advice could help retirement savers understand the risks posed by falling stock markets.
Millions of retirement savers are unaware of the risks that volatile stock markets pose to their pension schemes, the Pensions Advisory Service has found.According to the government-funded organisation, around five million UK employees are members of defined benefit pension schemes, payouts from which depend heavily on the performance of the shares in which they are invested.
However, many of these savers do not know that their pension pot could take a hit if stock markets tumble as they have done recently, it claimed.
"My concern is people think the default fund has been recommended to them and that it's appropriate for them personally, which it may not be, because it may be 100 per cent invested in shares," said Pensions Advisory Service spokesman Malcolm McLean.
He explained that savers could therefore be taking on more risk than they realise.
Pensions advice could help consumers to navigate through the different options available to them and help them spread their risk and diversify away from the stock market.
Figures from the Pension Protection Fund show that the funding shortfalls of defined benefit pension schemes more than doubled in August, the Press Association reports.
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