The global bond market sell-off is putting retirement incomes increasingly at risk, the boss of deVere Group has warned.
Nigel Green, deVere Group’s founder and chief executive, spoke out after a reported $450bn (£286.9bn, €399.3bn) was wiped off global bond markets in recent weeks, with another significant bout of turmoil yesterday.
Green said: “The bond market sell-off is threatening the retirement incomes and ambitions of a large number of workers. So-called ‘gold plated’ final salary schemes, which already have record deficits, are being hammered further because these pension funds are typically largely or wholly invested in bonds as they are perceived to be less risky than shares.”
Volatility in bond markets is thought to be due to a number of factors, including declining yields and oil prices. In some cases, government bond yields have fallen into negative territory. Investors had seen bonds as a safe haven when oil prices plummeted last year but they have since stabilised.
Green added: “The currently tumbling bond market is pushing company pension deficits even further into the red. I would urge people to have their company pensions checked sooner rather than later. This is because it is likely that their values could fall further as most trustees have already made almost every change possible, such as raising retirement age and amending the amount of pension increases, yet the schemes remain extremely vulnerable.”