UK – Pension fund assets in the UK have risen 16% to 709 billion pounds (1.06 trillion euros) as at the end of 2003, according to a new report.

“Pension funds totalled 709 billion pounds at the end of 2003,” said trade association International Financial Services London. “This was up 16% on the previous year, largely due to the recovery in equity markets, but down 13% on the record level in 1999.”

IFSL said: “The UK pension fund industry has been affected in recent years by various factors such as changes in regulation and accounting standards, the introduction of Stakeholder pensions and a continuation of the movement away from defined benefit to defined contribution schemes.”

The report added that pension funds’ allocation to equities rose to 67% at the end of 2003, from 64% in 2002. “UK government and overseas bonds accounted for around a quarter of UK pension funds’ investments in 2003. The remainder was held in cash and property funds.”

The association estimates that the total assets under management in the UK asset management industry rose six percent to 2.8 billion pounds in 2003. Institutional assets account for more 90% of assets under management – up six percent on 2002 and four times the 1990 total.

And it puts the industry’s contribution to the UK economy at around 0.5% of gross domestic product, or 4.9 billion pounds. Asset managers in the UK employed 23,920 people at the end of 2003, the report adds.