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Defined-contribution pension assets are back where they were a year ago

The value of the UK's defined-contribution pension assets has returned to the levels of September 2008, reaching 451 billion.

Aon Consulting reports while DC pension assets dipped to £344 billion in March this year, the value rose by £31 billion during July, from a June figure of £420 billion. The gains are predominantly thanks to rallies in the equity market - but they serve to demonstrate the volatility of retirement savings.

According to Aon's DC Pension Tracker, a 30 year-old worker has seen an annual pension income increase to £21,410 over the last month, from £20,659 the month previous. This is the highest reported figure since October 2008, when it was worth £21,489. And a 60 year old can expect a projected pension of £11,384, the highest since September 2008, when it stood at £12,048.

Helen Dowsy, head of DC at Aon Consulting, said: "These figures look promising as we return to asset figures roughly the same as they were a year ago. However, this month's figures serve to underline the volatile nature of DC investment. Someone retiring at the end of July may have a significantly higher projected retirement income than someone retiring a month before.

"Employers and trustees of occupational DC schemes have a key role in educating their DC scheme members - particularly those approaching retirement - to help them understand what they can do within their pension investments to mitigate this volatility."