The UK’s combined defined contribution (DC) pension savings have rebounded by over £103billion – or more than 25% – since this time last year, according to Aon Consulting.
The total value of DC assets stood at nearly £505billion at the end of November, up £16 billion compared to the end of last month. Aon Consulting’s monthly DC Pension Tracker measures the total asset value of UK workers’ DC pension accounts.
It also tracks the income in retirement of individuals at different ages who contribute 10% of a £25,000 salary to a DC arrangement and have an existing fund (valued as at September 2007) of £15,000 for age 30 and £150,000 for ages 55 and above.
Richard Strachan, senior consultant at Aon Consulting, said: “It has been another rollercoaster twelve months for UK workers. The nation has seen its combined savings fluctuate from a year-low of £344bn during March to a high of £518bn during October.
“Additionally, not only have insurance companies cut annuity rates, but ongoing fluctuations within their rates have added further confusion for the average worker trying to decide when to retire.
“A 65 year old looking to retire can now expect to receive an annual income of approximately £8,920, which is more than 20% higher than the £7,275 they would have received in November 2008.
“If the same pensioner had retired in February, though, they would have received an annual income of just £6,460. Such fluctuations continue to demonstrate the uncertainty facing British workers, leading to understandable apprehension.”
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