Projected annuity incomes have fallen again over the past four weeks due to flagging equity markets.
The latest data from Aon Consulting says for 30 year olds who plan to retire at 65, incomes have shrunk by £544 per year as their pension pots have greater exposure to equity markets.
By contrast, 60 and 65 year olds enjoyed a modest increase in projected retirement incomes of £52 and £61 respectively, regardless of the slight drop in equities.
Aon bases its research on individuals contributing 10% of a £25,000 salary to a DC scheme and having a fund of £15,000 at 30 or £150,000 at 55 or over.
"Whilst this month's figures paint a more positive picture for those closer to retirement, projected pensions for 30 year olds continue to be negatively impacted by ongoing volatile equity markets," says Chris McWilliam, senior consultant at Aon Consulting.
"The variation in figures month on month for these different age groups continues to underline the importance of moving to more secure and stable investments, such as government bonds, as a member approaches retirement in order to minimise the risk exposure of their pension to stock market fluctuations close to their intended retirement age.
"Failure to do so could mean that such members have to work longer or simply accept lower incomes in retirement."
Caring for children and elderly relatives
Similar to June 2007
Square Mile’s series of informal interviews
Fine reduced to £60,000
Two roles created