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In the back [ PLATFORMS & PENSIONS ]
work on what they call decumulation
strategies for members heading
for retirement. All auto-enrolment
schemes have both default and
optional plans to get you investing,
but when it comes to getting your
money out it all goes a bit Heath
Robinson, with a bunch of halfbaked
options such as taking the
cash, using a default withdrawal plan
or buying an annuity. This is tough
for people who know little about the
subject and feel happiest taking the
cash.
With other pensions, things get
worse. Auto-enrolment – being
relatively new – has at least made an
effort to provide some post-pension
freedom options, but other defined
contribution employer schemes tend
to leave it to the retiree to work out
what to do with their pot.
Platforms have plenty of tools to
help people saving for retirement
within a SIPP and most of these tend
to offer a flexible drawdown facility,
but there is little guidance on how to
budget out your pension pot.
The Financial Conduct Authority
wants all pension providers to
develop what it calls investment
pathways to improve outcomes for
retirees, but this has been delayed
by the coronavirus pandemic. At
least the industry knows it has to do
something soon.
Platforms have plenty of
tools to help people saving
for retirement in a SIPP and
most of these tend to offer a
flexible drawdown facility,
but there is little guidance
on how to budget out your
pension pot
What next?
Unless you have already retired,
help is on the way. The industry is
finally endeavouring to help the
large swathe of the British public
who don’t have an adviser through
the minefield of what to do with
their pension. It hasn’t solved our
problems yet, but give it 24 months
and there will be the products and
guidance needed to make our golden
years a little more lustrous.
Until then, make sensible
investments in a diversified portfolio
and don’t de-risk too early, nor start
spending your pension at 55.
Finally, make plans. Prepare
for good and bad outcomes and
devise ways in which you can have
a rewarding lifestyle whatever life
throws at you. We have just had a
glimpse of the ways in which life can
take unexpected twists and turns
and we need to be ready to deal with
them.
TRUSTNET
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