Deliver Your News to the World

Britain’s indecision at the polls cost retirees £800 a year


WEBWIRE

Aon Consulting outline how the election campaign, the result and the final decision affected retirement income

LONDON, People who retired during the week of indecision could be nearly £800 poorer than people retiring the week before or after the election, according to data from Aon Consulting, the leading employee benefits and risk management firm.

The Aon DC Index follows the projected retirement income of individuals at different ages that contribute 10% of a £25,000 salary to a DC 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. This retirement income is based on converting pension savings to an annuity.

Aon compared the retirement income figures for different age groups on a day of campaigning (30th April), the indecisive Results Day (7th May) and the first full day of the new Government (12th May). Results day witnessed significant stock market losses; Aon’s numbers reveal how external factors can have significant impact on the markets and therefore on your pension pot. Aon urges retirees to carefully consider when they choose to retire in alignment with elements on the wider political, social and economic agenda.

Retirement income projections over general election
Based on data collected, the projected annual retirement income of typical DC pension investors at different ages around the time of the election is as follows:30 year old:
• Campaign Day (30/4) £20,308
• Results Day (7/5) £20,022 ( fell £286 )
• Decision Day (12/5) £20,213

60 year old:
• Campaign Day (30/4) £12,018
• Results Day (7/5) £11,230 ( fell £788 )
• Decision Day (12/5) £11,767

65 year old:
• Campaign Day (30/4) £8,887
• Results Day (7/5) £8,251 ( fell £636 )
• Decision Day (12/5) £8,684

Richard Strachan, Senior Consultant at Aon Consulting, commented: “The past two weeks are the perfect illustration of how external factors impact the stock market’s volatility and therefore peoples pensions.

“Savings were looking relatively steady in the week running up to the election but on results day, stock markets took a nose dive and retirement income suffered significantly. For UK retirees, the amount lost is significant and could be the cost of a cruise or a golf membership.

“Happily for savers, Wednesday this week saw a return to more steady levels once the country’s limbo had been resolved.”

ENDS

Notes to Editors

About The Aon DC Pension Index

The Aon DC Pension Index analyses the impact of market changes on the pensions of average workers. The research calculates the expected pension income at retirement for individuals, based on assumptions for future investment return and inflation as well as taking into account the actual changes in investment performance and annuity rates.

The Aon DC Pension Index examines the changes in workers’ pensions month on month, depending on different age groups and assuming 100% of the pensions are invested in equities. It tracks the income in retirement of individuals at different ages who contribute 10% of their £25,000 salary to their retirement savings and have an existing fund (valued as at September 2007) of £15,000 for age 30 and £150,000 for ages 55 and above.

Notes to Editors
About The Aon DC Pension Index
The Aon DC Pension Index analyses the impact of market changes on the pensions of average workers. The research calculates the expected pension income at retirement for individuals, based on assumptions for future investment return and inflation as well as taking into account the actual changes in investment performance and annuity rates.

The Aon DC Pension Index examines the changes in workers’ pensions month on month, depending on different age groups and assuming 100% of the pensions are invested in equities. It tracks the income in retirement of individuals at different ages who contribute 10% of their £25,000 salary to their retirement savings and have an existing fund (valued as at September 2007) of £15,000 for age 30 and £150,000 for ages 55 and above.



WebWireID117059





This news content was configured by WebWire editorial staff. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.