The Aon UK DC Pension Tracker rose over the first quarter of 2026, with all savers expected to see an increase in their expected future living standard in retirement.
The Tracker rose from 67.5 to 70.5 over the first quarter of 2026, driven predominantly by an increase in expected return assumptions pre-retirement and despite negative benchmark investment returns across major asset classes over the quarter.
The youngest saver saw an increase of around £1,500 p.a. (4.3 percent) driven by an increase in expected future investment return assumptions pre-retirement, offset to a degree by negative investment performance over the quarter.
The 40-year-old saver saw the largest increase of around £1,250 p.a. (or 3.1 percent) in their expected retirement income. Again, this was driven by a rise in post-retirement expected future returns.
The oldest saver’s income was broadly flat (an increase of around £75 p.a. or 0.3 percent). This was as a result of an increase in expected future returns pre- and post-retirement being almost entirely offset by negative investment return over the quarter.
Overall, the oldest saver is expected to be the worst off in retirement, albeit with an average retirement income of around 150 percent of the ‘minimum’ Retirement Living Standard.
The publication of the Second Pensions Commission’s interim report earlier this year also highlighted the scale of the UK’s adequacy challenge, noting that around 4 in 10 of working age people are currently under-saving for retirement.
Matthew Arends, partner and head of UK Retirement Policy at Aon, says: “The Second Pensions Commission delivered a clear message. Getting more people saving through auto-enrolment was a major achievement, but participation alone is no longer enough. With millions of people projected to fall short of an adequate retirement income, the focus must now shift towards ensuring people save enough, for long enough, and that they can turn those savings into sustainable retirement incomes.”
A minimum retirement lifestyle is now up 3.7 per cent to £13,900 a year for a one-person household, while a moderate lifestyle costs £32,700 for one person (up 3.2 per cent), and a comfortable lifestyle costs £45,400 for one person (up 3.4 per cent).
