XPS DC:UK Savings Watch
XPS DC:UK Savings Watch benchmarks a typical DC pension pot at retirement against industry living standards.
Members with DC pension pots are at risk of not meeting their retirement goals. This means that once retired their standard of living will likely be lower.
XPS DC:UK Savings Watch shines a light on this growing concern to demonstrate in today’s terms what this means to a typical member and to help identify whether there is likely to be an income shortfall in retirement.
Employers and trustees can use XPS DC:UK Savings Watch, on a scheme specific basis, to gain valuable insight into the adequacy of their DC pension arrangement. By aligning projected pension pot values with recognised industry living standards, we aim to empower employers and trustees to support their members and provide clearer insights on retirement adequacy.
XPS DC:UK Savings Watch, updated daily, provides insight on a typical member and how their projected DC pension pot changes over time, based on a variety of factors including market dynamics and inflation expectations.
What does XPS DC:UK Savings Watch show?
The pink line is the expected value (in today's terms) of a typical member’s DC pension pot at retirement, allowing for future contributions and investment returns in line with XPS Capital Market Assumptions.
The coloured bands show how much (in today’s terms) is estimated to be required to provide each level of the PLSA/Loughborough University Retirement Living Standards.
XPS DC:UK Savings Watch assumes the following:
- Year of birth: 1980
- Retirement age: 68
- Salary: £31,461 pa at age 40 - increasing by 0.5% pa in real terms until retirement
- DC pot: £50,000 at age 40
- total annual contributions of 8% (employee + employer)
- investments in line with a typical default strategy
The PLSA/Loughborough University Retirement Living Standards show three levels:
- Minimum: “Covers all your needs, with some left over for fun.”
- Moderate: “More financial security and flexibility.”
- Comfortable: “More financial freedom and some luxuries.”
XPS DC:UK Savings Watch uses market data from the London Stock Exchange Group to model the size of a typical member’s DC pension pot, projected to retirement and shown in today’s terms. This is compared with the estimated amount required to achieve the PLSA/Loughborough University Retirement Living Standards: minimum, moderate and comfortable.
XPS DC:UK Savings Watch is updated daily based on market conditions.
XPS DC:UK Savings Watch provides an insight on the level of retirement income the typical member might expect to achieve; and how that has changed over time based on a variety of factors.
Comparison with the various PLSA/Loughborough University Retirement Living Standards shows whether the member is on track and hence whether the investment strategy or contribution rate remains adequate for each given outcome.
Regularly recalibrated against data from the PLSA/Loughborough University Retirement Living Standards, UK Government, MoneyHelper and market data from the London Stock Exchange Group, XPS DC:UK Savings Watch presents the estimated retirement DC pension pot in today’s terms, showing how close a member might be to achieving certain retirement standards.
The value of the typical member’s expected DC pension pot varies over time due to market experience, inflation expectations, and any changes to our underlying assumptions in respect of the typical member.
Source:
XPS Group
Employee earnings in the UK - Office for National Statistics.
The data in the above tracker incorporates data from the PLSA/Loughborough University Retirement Living Standards, UK Government, MoneyHelper, and LSEG.
XPS DC:UK Savings Watch should not be relied upon for any advice or taken as an authoritative statement of the law.