A further wave of closures of defined benefit pension schemes looks in the offing just as employees are regaining faith in pensions as a way of saving, according to the latest survey from the National Association of Pension Funds.

Pension funds are being battered by the financial turmoil that will see their value fall sharply on current stock market and bond performance. But even before the financial crisis reached its current peak, a further one in five of the remaining defined benefit – chiefly final salary – schemes were considering switching their employees to money purchase pensions, the NAPF’s annual survey shows. A further 10 per cent were seeking to reduce costs or risks.