Financial advisers are being urged to rethink retirement income strategies in light of growing longevity, market volatility and looming tax reforms that could affect legacy planning.
This guide explores how retirees can navigate the complex decumulation landscape, with a shift towards flexible, blended approaches that combine drawdown and annuities.
With average life expectancy for new retirees now stretching into the mid 80s, and annuity rates hitting decade-high levels, clients face increasingly nuanced decisions around how and when to access pension income.
While drawdown remains popular for early retirement flexibility, more advisers are revisiting annuities — especially for clients with lower risk tolerance or those approaching age 75.
From April 2027, most unused pension funds will be subject to IHT, weakening one of drawdown’s key advantages as a legacy planning tool.
This is prompting wealthier clients to consider annuitisation, gifting strategies or even using pension income to fund life assurance in trust.
Meanwhile, cash flow modelling and drip-feed drawdown are helping clients better manage tax, income timing and market exposure.
Advisers are also increasingly factoring in behavioural preferences, with personalisation of retirement plans emerging as a key theme.
The conversation is no longer just about retirement income. Clients are planning for two or three generations because legacy is shaping the plan from the outset.
This guide is worth 60 minutes of CPD.