Surging stock markets mean that many employees may be able to retire on a reasonable income earlier than had been recently feared.
Changes in annuity and equity prices, as well as pension contribution levels, can all influence the expected retirement age and income of a defined contribution pension scheme member.
According to research conducted by Mercer, recent market developments mean that a typical pension scheme member considering retirement will now have to work around 15 months less in order to retire on the same expected income.
At the worst point, in March last year, a member would have found themselves working until nearly age 67 instead of 65, to achieve the same level of income.
"With the recent turbulent stock market conditions and volatile annuity prices, the outlook for people nearing retirement is looking better now than it has over the last nine months," said Steve Charlton, a principal and senior consultant at Mercer.
"Our findings highlight that the timing of retirement can be crucially important for members of defined contribution pension schemes.
"With the rise and fall of stock markets and annuity prices, the value of individual pension pots can swing up and down, and significantly influence people's quality of life in retirement."
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