Pension fears as Vodafone shares dive

Vodafone, once Britain's biggest company, was humiliatingly reduced to the status of a penny stock today as its shares plunged through the key £1 level.

Amid a frantic sell-off in which 240 million shares changed hands, the price dived 10.5p to 98p, wiping more than £7 billion from the value of the mobile phone operator.

The collapse affects virtually everyone with a pension or long-term savings plan because Vodafone was and is a big component in the vast majority of fund managers' portfolios.

Its value has now collapsed by £205billion - more than the GDP of Belgium - since its peak in the spring of 2000, when investors rushed to buy into high-technology companies.

At that time Vodafone was Britain's biggest firm by value, dwarfing even established heavyweights such as British Petroleum and banking giant HSBC.

A cut in the profits forecast for Vodafone's huge German and Italian businesses triggered the sell-off.