Feature


While reporting of the gilts crisis focused on how it impacted DB schemes, it has also been bad news for some unlucky DC mem- bers. Mona Dohle reports.


such as equities, but as they approach retirement their portfo- lios are gradually converted to more liquid, and presumably more secure, fixed income assets.


The irony in this case is that the assets many investors deemed to be the most secure – UK government bonds – have been far from stable. While equity markets have been rocky. The FTSE100 is down -2.6% when compared to the same period a year earlier.


In contrast, yields on 10-year UK government bonds have risen by more than 250%. That is good news if one plans to hold


these bonds for a longer period of time, but not for those wish- ing to cash in on their retirement savings. “The sell-off in gilts has meant that older pension savers invested in defined contribution pre-retirement funds might have noticed a dip in fund values, which will have an impact on individuals if they intend to retire imminently,” says Jon Cun- liffe, managing director of investments at B&CE, the provider of The People’s Pension.


A closer look under the bonnet of different retirement stage strategies reveals that the outcomes can vary significantly,


November 2022 portfolio institutional roundtable: Defined contribution 27


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