Defined contribution pension plans have halved in value over the past three years, according to data by pensions consultants Lane Clark & Peacock (LCP).

The revelation will sound alarm bells among the growing number of workers whose employers only provide defined contribution, or money purchase, schemes. Companies are increasingly opting out of offering the more generous, and more expensive, final salary or defined benefit pension plans which guarantee a pension based on the percentage of pay. Defined contribution schemes leave the individual member responsible for the performance and value of their fund rather than the employer.