The value of employees defined contribution (DC) pensions have plummeted by 157 billion over the last year, according to Aon Consulting.

The value of DC pensions stands at £395 billion compared to £552 billion this time last year - a drop of 28%.

Aon estimates over 3.7 million employees in the UK pay into a DC pension every month and, in the past year, contributed £6.7 billion to their schemes. But this drop in assets means older workers may have to work longer than they thought.

Helen Dowsey, principal in the benefits solutions division of Aon Consulting, said: "It may appear a double blow to workers that not only are they facing more of a struggle to make ends meet, but the economic turmoil is also seemingly eating into the money they have been putting aside for retirement."

But she added: "Most workers will have the fortune of time on their side as their retirement will be many years away, enough time to weather the current storm."