Net investment by U.K. pension funds plunged to 205 million ($326 million) in the fourth quarter, the lowest level since the beginning of 1971, according to the U.K.'s Central Statistical Office.
That level represents a fall of nearly 1 billion from the third quarter.
In the fourth quarter, net investment of 1.7 billion in U.K. government bonds was nearly offset by net disinvestment in overseas securities totaling 1.6 billion.
In 1994, U.K. pension funds' total net investment was 4 billion, 1.1 billion lower than in 1993. Net investments in gilts totaled 9.5 billion while net selloffs of overseas securities hit 4 billion. Pension fund holdings of British stocks edged up by 100 million, following a decline of 3.6 billion in 1993.
Total U.K. institutional investment fell to 7.7 billion in the fourth quarter, the lowest level in four years. The 1994 total was 45.4 billion, down from the record high of 51.6 billion in 1993.
Insurance companies saw the steepest fall last year, with net investment totaling 27.7 billion, down from 32.8 billion in 1993. Net investments by investments trusts, however, increased to 5.6 billion, up from 2.9 billion the year before. Unit trust investments declined, to 8.2 billion in 1994, from 10.8 billion the year before.
In the fourth quarter, total institutional purchases of U.K. stocks rose to 3.7 billion, up 1 billion from the previous quarter. Foreign securities holdings shrank by 1 billion, after net investment of 1.4 billion in the third quarter.
(denotes British pounds)