British pension values plummet

Private pensions for retiring British workers are down nearly a third compared with those who retired three years ago, an accounting firm said. The declining value of the private pensions resulted from a combination of falling stock values and record low interest rates, The Daily Telegraph reported, citing research from PriceWaterhouseCoopers. The firm said those considering retiring this year may be forced to put off claiming pensions until market conditions improve. Peter McDonald, a PwC partner, said compared with three years ago, a typical \"money purchase\" pension is now worth about 30 percent less. PwC said about $155,210 saved in a pension as of three years ago would have brought an income of about $11,641. That same estimated $155,210 would have yielded about $10,889 three months ago and about $9,561 this week. \"Many people retiring now will be caught between a rock and a hard place. If they defer buying an annuity until prices improve, they\'re stuck with no income in the meantime, which might not be an option,\" McDonald said. The FTSE 100 index of leading shares has lost approximately 15 percent of its value since May, which in turn has reduced the value of pensions for many who contribute to them to build their pensions. When investors sell shares, many move money into government bonds, raising the price of the bonds and lowering the yield on them. The bonds are an important component of pensions, as most retirement funds invest in them and pay pensions with yields.