£150bn wiped off pensions

MORE than 100,000 people approaching the cut-off point to start drawing their pensions could have their income slashed by a fifth by the markets crash, experts warned last night.

FEARS Chris Grayling FEARS: Chris Grayling

At least £150billion has been wiped off the value of pension funds in the past year, sparking grave fears over the long-term prospects of millions of hard-working Britons. [>

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While the markets may recover in time for anyone able to delay retirement, those approaching the cut-off point of 75 – when complex rules force them to settle their pension arrangements –face a bleak future. [>

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People must use their pension pot to buy an annuity before their 75th birthday, which provides a retirement income for life. But with the stock market having lost 21 per cent of its value in the past week alone – and further falls predicted – those approaching retirement age are being forced to cash in their savings at the worst possible time. [>

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The Government has confirmed it is considering Conservative Party proposals to suspend the rules, allowing people to delay retirement at least until the markets recover slightly. [>

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Tory work and pensions secretary Chris Grayling said the Government needed to act immediately to prevent thousands of elderly Britons being plunged into poverty. [>

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He added: “This week’s events will leave Britain facing a huge pensions gap. The big fear is that it will accelerate the process of decline in our pensions system that started with Gordon Brown’s tax raid 10-years ago.” [>

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Pensioners who opted for income draw-down rather than buying an annuity are also facing massive losses. [>

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Around 370,000 people – who have roughly 70 per cent of their financial portfolio invested with the stock market – will have lost over £36,000 each. [>

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The FTSE 100 index of leading shares fell by almost nine per cent on Friday. [>

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