Savings

The National Association of Pension Funds (NAPF) has reiterated that pension funds are long-term investors and stock market volatility will not have an enduring effect on workplace pensions.

In addition, pension funds who have defined benefit (salary related) or defined contribution (money purchase) schemes, have over time been taking steps to reduce their exposure to volatile equities.

Nigel Peaple, NAPF policy director, said: Pension funds involve long-term investing so we have no reason to believe that the current market conditions will affect their ability to pay out the expected amounts to members. There is no reason to believe that short-term volatility will have a significant impact on workplace pensions.

In addition, pension funds invest in a range of assets, so to some extent, they are cushioned from such movements and have been reducing their equity exposure for some time.

The continued volatility will also not affect the ability of schemes to pay the pensions due to their members.