Pension pots shrank further in the July, with a 30 year old’s annual projected pension falling £518 over the month, according to Aon.
The news was little better for 60 year olds, whose projected annual pension income decreased by £358 in July.
Figures from Aon’s DC Index show 65 year olds left on a mere £7,666 a year, almost half the adequate standard of living £14,400.
As experts continue to debate the future of the economy with predictions varying from recovery to double dip recession – the UK’s pension investors continue to see falling returns.
Even those who plan to move to cheaper countries in their retirement – recent Aon research found that 1 in ten Brits would like to retire to Spain – would struggle to achieve a decent standard of living in their country of choice.
The Aon DC Index follows the projected retirement income of individuals at different ages who contribute 10 per cent of a £25,000 salary to a defined contribution (DC) pension 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, says: “Though we have seen some improvement to economic circumstances in the past six months, pension pots are in only marginally better shape than this time last year and due to the volatility in stock market activity, pension pots shrank once again during the last month.
“As some areas of the economy forecast growth and others continue to struggle, making the right investment choices is key for any pension investor, whether individual or institutional. Employers should ensure their pension schemes – and their default funds, in particular – are invested wisely to maximise the green shoots of recovery. Individual pension investors should keep a watchful eye on their pension pots to ensure their retirement plans are on track, and make suitable provision for their future.”
