UK - The combined value of the UK's defined contribution (DC) pension assets rose by £31bn (€36bn) in July and returned schemes collectively to the same levels recorded in September 2008, suggests data presented by Aon Consulting.

Figures from the latest edition of its DC Pension Tracker showed there was a 6.8% increase in asset values from £420bn at the end of June to £451bn a month later, following recent rallies in the equity markets.

This is a fraction above the £450bn recorded in September last year, however Aon noted the monthly increase highlights the "volatile nature of DC investment", as the aggregate value of DC savings dropped 2.3% in June from £430bn at the end of May. (See earlier IPE article: UK DC plan assets hit by falling markets)

At the same time, while Aon pointed out that DC assets have recovered from a low of £344bn in March, the new high is still around £100m lower than at the peak of £550bn recorded in September 2007 - just before the impact of the credit crunch was felt. (See earlier IPE article: DC recovery needs another nine months - Aon)

Helen Dowsey, head of DC at Aon Consulting, said these conditions mean workers need to pre-plan for their pension and "understand and regularly review their investments, whose value can change dramatically in a short space of time".

Figures from the DC tracker showed a 30-year-old contributing 10% of a £25,000 salary into a DC scheme would now receive a projected annual pension income of £21,410, compared to £20,659 in June, and this is the highest figure since October 2008 when the income was £21,489.

A 60-year-old worker contributing the same proportion of a £25,000 salary, and fully invested in equities, would also see a £1,000 increase in annual income from £10,373 at the end of June to £11,384 a month later, against a high of £12,048 in September last year.

Dowsey added: "Employers and trustees of occupational DC schemes have a key role in educating their DC scheme members - particularly those approaching retirement - to help them understand what they can do within their pension investments to mitigate this volatility."

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

Topics