Recent activity in the stock market means that the sector currently has arrears of £21 billion, with the FTSE itself having £73 billion wiped off it.

This means that the surplus that had been built up by the industry this year has been completely negated and volatility will remain while markets assess the damage.

People who have invested into pension schemes may find themselves affected if the downturn cannot be reversed, although they have been urged not to panic.

“It will take time for markets to assess the extent of the losses due to the decline in sub-prime markets,” said Henk Potts, equity strategist at Barclays Wealth.

The pensions industry has suffered a turbulent 2007.

In this year’s Budget, then-chancellor Gordon Brown announced plans to scrap pension terms assurance, which may leave a number of low-income families struggling to make ends meet.

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