Defined contribution (DC) pension scheme members are set to see an improvement in their expected future living standard in retirement, as the Aon UK DC Pension Tracker rose in the first quarter of 2026.

The tracker increased from 67.5 to 70.5 between January and March, with the improvement primarily driven by an increase in expected return assumptions pre-retirement, despite negative benchmark investment returns across major asset classes in Q1.

This resulted in an improvement in expected retirement income for all scheme members, although younger savers were found to have benefited the most from higher future return assumptions pre-retirement.

However, the tracker’s data is from before June’s increase to Pensions UK’s Retirement Living Standards (RLS), which outlined the need for greater income to support lifestyles in retirement.

Furthermore, the impact of April’s state pension increase was also not accounted for in Q1’s tracker, with this and the updated RLS to be reflected in the next quarter’s publication.

“The latest RLS remind us that the ‘finish line’ for an adequate retirement continues to move as living costs change and expectations evolve,” said Aon partner and head of UK retirement policy, Matthew Arends.

“Savers have an important - and difficult - task in understanding their own target and whether their current level of savings can get them there.”

Arends also highlighted the Second Pensions Commission’s interim report, which recognised the success of auto-enrolment but emphasised the significant retirement adequacy challenge that remains.

"The Second Pensions Commission delivered a clear message,” he said. “Getting more people saving through auto-enrolment was a major achievement, but participation alone is no longer enough.

“With millions of people projected to fall short of an adequate retirement income, the focus must now shift towards ensuring people save enough, for long enough, and that they can turn those savings into sustainable retirement incomes.

“I would hope that the commission's findings act as a catalyst for employers, pension schemes and policymakers and that they start to address these challenges now, rather than waiting for the final recommendations.”

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