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Retirement strategies

The introduction of the pension freedoms in April 2015 means planning an income in retirement is far from straightforward. Here we present some ideas and analysis on how clients can successfully navigate a life stage that can last 30 years or more.

We ask Laura Whetstone, Director at Lathe & Co Wealth Advisers, about the challenges financial planners and their clients have when approaching retirement, including cashflow reporting and the impact of the pensions and IHT policy changes. Paul Squirrell also asks John Hale how platforms are rising to these challenges and how they can support the changing income needs of clients through retirement.

00:00 - Insight into the current retirement income landscape
00:58 - The 2015 pension revolution
02:57 - When does retirement planning typically begin?
04:06 - What are the main challenges as a client approaches retirement?
04:58 - How important is cashflow forecasting?
06:40 - What impact will the policy changes on pensions and IHT have?
08:00 - How are platforms dealing with these Challenges?
09:20 - When do the client starts to draw their benefits?
10:44 - How does this fit with an adviser's Centralised Retirement Proposition?
12:13 - What is the most important role a provider must perform?
13:00 - Closing remarks

A quick overview of the reports available below, that investigate key retirement themes and challenges for financial planners and their clients:

  1. How much does a comfortable retirement cost?
  2. Countdown to retirement
  3. The foundations of retirement planning – ten pitfalls to avoid
  4. Investment risk and retirement
  5. Sustainable withdrawal rates for drawdown clients
  6. The impact of inflation on retirement planning
  7. Reinventing retirement
  8. Help your clients survive retirement
  9. The path through retirement 

As people begin to reflect on their life after work, they’re often consumed by one question: How much do I need for a comfortable retirement? In this report we look at the impact of different risk factors and how retirees could manage or underwrite these risks to make the most of their retirement savings. 

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This report considers the options available if a savings shortfall is identified some years out from retirement. The most common options are saving more or retiring later. In the case of the former, which products are the most effective? There are also other solutions available which can shore up retirement finances. As retirement approaches, advisers should take a holistic view of the client’s assets to create a comfortable retirement. 

This report explores some of the issues raised in the FCA’s review, together with other potential pitfalls, to ensure retirement planning processes are robust. For many advisers, this report will be a checklist against which to validate their practices and processes. But none of us are infallible. It’s important that, collectively, we do all we can to prepare and protect clients at this critical stage of their life. 

The FCA has emphasised the need for robust measures of risk capacity and tolerance at retirement. This is particularly important given the popularity of drawdown. 

There’s also evidence that suggests aversion to risk increases at retirement. However, an overly conservative portfolio may not deliver the returns needed. Conversely, too great a reliance on high-risk assets can expose retirees to sequencing risk.

In this report, we seek to develop a deeper understanding of investment risk throughout retirement. We then evaluate how to manage risk during this period and explore the pros and cons of different solutions.

In its thematic review of retirement income advice, the FCA raised concerns about the blanket use of withdrawal guide rates without accounting for individual circumstances. This new report examines the variables that determine a sustainable withdrawal rate and how these can be applied in practice. It describes how rates could be modified to take account of general issues like charges, asset allocation and inflation together with personal circumstances like age, health and overall wealth. 

Inflation can have a profound impact on the finances of retirees and its influence is widespread. In this special report, we examine crucial issues such as:

  • Is the inflation rate at the start of retirement potentially as damaging as sequencing risk?
  • Should retirement income be fully protected throughout retirement?
  • Given annuities are impacted by inflation, do increasing annuities offer value for money? 

The word ‘unretired’ has recently entered the financial services lexicon. It’s used to describe people who’ve left the workplace to retire and subsequently decide to return to work. This is just one part of a fluid movement towards a more progressive concept of retirement. Increasingly, people no longer stop work abruptly one day and retire the next. This creates new challenges for financial advisers which we are addressing in this report. 

There are a number of ways advisers can help clients navigate the perils of retirement, however it’s clear that no one size fits all. In our insightful report Help your clients survive retirement, we review how the thinking around sustainable withdrawal rates has changed. 

Retirement these days is no longer a single event. The initial transition to retirement could involve several twists and turns and require regular reviews. This report charts some of the issues that can arise and their possible impact. We’ve also included a checklist you can use to compare with your own process. 

Supporting your client conversations

We’ve created a number of guides to support your client conversations on pensions and retirement income planning.

Making a withdrawal from your pension

All your clients need to know about making withdrawals from their pension, including all the income options open to them.

A flexible retirement income for whatever the future holds

A detailed look at drawdown from how it works to the advantages and drawbacks. We also compare it to other income options.

Explaining how pension withdrawals are taxed

A guide for clients who are thinking about accessing their pension pots and are wondering how tax could affect their payments.

Related content

Guaranteed Lifetime Income plan

The plan is designed to address the challenge of ensuring retired clients have sufficient income over their lifetimes.

The Pension Forum

Paul Squirrell, our pension expert, clarifies the rules relating to some specific areas of retirement planning.

Retirement and pensions training

This section is designed to help anyone studying for pension exams or wanting to build their pension knowledge.
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