Many savers found out in a new report that their pension schemes are still deep in the red.
Workplace retirement savings remain in a financially precarious state, gloomy new industry figures have revealed.
The Pension Protection Fund (PPF) announced that the UK's 7,800 defined benefit workplace schemes were £188.5 billion in deficit at the end of April. However, this is a slight improvement over March, where the plans were £242 billion in the red.
Total shortfalls of schemes in deficit stood at £204.8 billion, down from £253.1 billion the previous month, while the total surplus of schemes in the black likewise improved from £11.1 billion to £16.4 billion.
Defined benefit, or final salary, schemes are widely seen as offering more generous retirement incomes for savers than other types of pensions. This is because they are structured to provide stronger guarantees for those who save into them and are less vulnerable to volatile markets.
However, defined benefit plans can also prove costly for employers if they slip into the red. Increasing numbers of the schemes are being shut to new savers as employers seek cheaper pension alternatives for staff.
Market movements were blamed by the PPF for the continuing poor financial performance of the defined benefit pensions sector. "Over the past year, the falling equity markets and bond yields have led to an overall worsening of the funding position," the organisation said.
"Lower bond yields resulted in a 10.4 percent increase in aggregate liabilities while weaker equity prices reduced assets by 11.9 percent over the year."
