Reports and Briefing Notes
Investment market volatility: analysis commissioned by TUC
Potential retirement outcomes under both known historical variations and uncertain future investment returns have been projected using the PPI Individual Model. This modelling gives a scale to the impact that the investment market may have upon an individual as a result of having to bear this investment risk. Increasingly investment strategies adopted by DC default funds are likely to include a wider variety of investments. This diversification across asset classes may reduce the spread of outcomes, but may come at a cost to an average outcome.
Chapter one looks at the impact of historical investment returns upon member outcomes. Using a standardised contribution pattern, it assesses the impact variations have on the accumulation of a pension pot.
Chapter two explores the uncertainty which is caused by unknown future investment returns.