Pension provider and consultant XPS has launched a new tracker to benchmark a typical DC pension pot at retirement against industry living standards.

The DC:UK Savings Watch tracker will compare the projected value of a typical DC pension pot at retirement with the PLSA/Loughborough University Retirement Living Standards’ three levels: minimum, moderate and comfortable.

The standards provide an indicator of the income needed in retirement to maintain different levels of quality of life.

With growing interest in ‘pension adequacy’, XPS says the DC:UK Savings Watch will aim to provide insights for employers and trustees.

The tracker will anticipate the value of a typical DC pension pot at retirement (shown in today’s terms). This will be mapped against the estimated amount required to achieve the Pension and Lifetime Savings Association (PLSA)/Loughborough University Retirement Living Standard’s minimum, moderate and comfortable lifestyles in retirement.

The XPS DC:UK Savings Watch is updated daily and tracks a typical member and how their projected DC pension pot changes over time, based on factors including market dynamics and inflation expectations.

It will be regularly recalibrated against data from the PLSA/Loughborough University Retirement Living Standards, UK Government, MoneyHelper and market data from the London Stock Exchange Group.

The 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.

Mark Searle, head of DC Investment at XPS Group, said: “XPS DC:UK Savings Watch not only models a typical DC pension pot, it can also model scheme specific data to help employers and trustees understand the savings targets their members need for a secure retirement.

"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.  

“We know the importance of planning for a future that aligns with financial goals, so we’re excited to launch XPS DC:UK Savings Watch as a practical way to help employers and trustees identify the gap between retirement aspirations and realities. Early intervention through changes to the investment strategy and / or contribution levels can then be discussed to move members to a more secure retirement.”

• An online example of XPS DC:UK Savings Watch tracker is available here: XPS DC:UK Savings Watch