The firm’s new research tool, the Aon DC pension tracker, shows the value of DC pension assets stood at £550bn in the beginning of the crisis in September 2007 and 16 months on at the end of January 2009 the value was slashed to £410bn.
The tracker aims to provide a realistic gauge of how the UK’s DC pension pot, into which over 3.7 million UK workers pay every month, is faring. It tracks the change in size of the British DC pension market and calculates the expected pension income at retirement for people of different ages.
The tool shows that a 60-year-old who is contributing 10 per cent of a £25,000 salary and expecting to retire in five years has seen their total projected pension fall by 36 per cent, meaning they can now expect to receive £10,900 annually compared with £17,100 forecast in September 2007.
The impact on younger workers is not so severe, with a 30-year-old employee over the same period has seen their projected pension fall 8.5 per cent.
Principal Helen Dowsey says: “Over the last year, DC pension scheme savers have been hit hard by the falls in equity markets and people need to take an active role in reviewing their pensions. We urge employers and employees to maintain the long-term view that pensions are the best way to save for retirement.”