Defined contribution (DC) pension scheme assets have increased for the second consecutive month by ten per cent, to a combined total of £418bn, according to Aon Consulting.

Aon attributes the rise, measured by the Aon DC Pension Tracker, to a bullish performance in global equity markets. The rise has resulted in a more positive outlook for future UK pensioners, although Aon said a further 32 per cent increase is required to put DC assets back to September 2007 figures of £550bn.

However, the Pension Tracker has also flagged a 'birthday lottery', with those turning 65 in January receiving £266 less a year than someone who reaches this age in April. Aon said this can be avoided through investment strategies such as moving out of risky asset classes.

Helen Dowsey, principal at Aon Consulting, said: "Global stock markets have seen one of the strongest rallies ever over the last month which has had a positive effect on the projected retirement income for UK retirees. Unfortunately because annuity rates are still low this has wiped out some of the investment gain.

"However, given DC pension pots have fallen dramatically since the beginning of the credit crunch it is far too early to say we are witnessing a recovery as yet.

"For older workers, when to retire can be a birthday fluke with some doing significantly better than others by virtue of their birthday falling at a time when the markets are up. However, by ensuring that sensible investment policies are adopted in the years running up to retirement this 'birthday fluke' can be avoided. In particular, by moving assets from riskier classes to those that better match the prices of annuity rates it has been possible to weather the storm of the credit crunch for those close to retirement. It is never too late to consider the best investment strategies and figure out exactly what is needed to live on in retirement and how best to get there," she added.

- Pensions Age May 2009

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