UK - Employees investing for retirement through defined contribution pension arrangements have seen the value of their assets fall by £157bn (€194bn) or over 28% in the last 12 months, according to data from Aon Consulting.

A year-on-year analysis of DC scheme assets reveals while the pension plans of 3.7 million people received contributions worth £6.7bn in that time - paid by both employers and employees - the combined pot of DC assets has plummeted in value from £552bn in October 2007 to £395bn by October 2008.

The indications are those close to retirement will subsequently have to work longer before they retire, Aon has suggested, at a time when people will just begin to feel the economic pinch of the credit crunch and the pending recession.

Officials at Aon recognise will it now take "a long time" to bring investments back to the level of investment and returns seen last year.

But Helen Dowsey, principal at Aon's Consulting employee benefits divisions, suggests workers should not panic about the current level of savings.

"Most workers will have the fortune of time on their side as their retirement will be many years away - enough time to weather the current storm," said Dowsey.

"For those nearing retirement, it will be even more essential to seek professional advice on all the options available to them and how to get the most from their pension. For example, many may be tempted to switch their pension assets half in equities at low value and move into cash but it's not a good time to do this whilst equity markets are falling - it effectively consolidates loss. For some it may be a question of delaying retirement," she added.

The revelations over DC pension plan arrangements follow figures published by Aon at the beginning of the month suggesting defined benefit plans had seen the top 100 UK occupational pension plans had a £3bn deficit.