Defined contribution (DC) pension scheme members are expected to see an improvement in their future living standard in retirement, with the Aon UK DC Pension Tracker rising sharply in the second quarter of 2026.

The tracker, which measures the expected retirement outcomes of four sample DC pension savers against Pensions UK’s Retirement Living Standards, rose from 70.5 to 77.3 over the second quarter of 2026, with all sample savers projected to see an increase in their expected future living standard in retirement.

Aon said the increase was the result of higher expected future investment returns in the period up to retirement, together with positive actual benchmark investment returns, in particular for equity assets, following the previous volatile quarter.

Younger savers were found to have benefited most from the higher future returns on investments, compared to older members who are closer to retirement.

The 40-year-old sample saver in the tracker was projected to achieve a comfortable retirement living standard for the first time, while the 30-year-old and 50-year-old savers were expected to reach around 90 per cent of that benchmark.

However, the oldest saver remained the worst off in retirement, despite being on track to achieve around 150 per cent of the minimum standard.

In June 2026, Pensions UK reported an increase in the income needed to meet the latest Retirement Living Standards, driven by rising living costs.

In isolation, this reduced the overall tracker by around 4.2 from an otherwise all-time high position.

However, the impact was offset by April's state pension increase, strong investment market performance and higher future return assumptions.

Aon said the state pension increase was particularly beneficial for lower-income savers, with the full state pension now covering more than 90 per cent of the minimum standard for someone retiring today.

Commenting on the results, Aon associate partner, Steven Leigh, said: “The state pension provides a vital foundation for many savers, but rising Retirement Living Standards mean that many savers may face a significant shortfall when targeting a higher standard of living in retirement.

“While it is positive that one of our sample savers is for the first time projected to reach the comfortable living standard, volatile market conditions and uncertainty on their retirement age can make planning difficult for savers and many do not know if they are on track for an adequate retirement. “

He added this was also true of many responsible for running workplace pension arrangements.

Aon’s 2026 DC pension and financial wellbeing survey found that 73 per cent of respondents did not know the expected outcome for a typical lifetime member of their DC plan.

“This adequacy blind spot could ultimately have a detrimental effect on succession planning, employment costs, employee engagement and the commercial success of businesses,” he continued.

“There is a real opportunity for those running workplace pensions to get better oversight of expected outcomes for members of their arrangements.”

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