Latest News

The Financial Regulators Review Highlights Risks for DIY Pension Drawdown

HOW THE RETIREMENT INCOME MARKET HAS EVOLVED SINCE THE PENSION FREEDOMS WERE INTRODUCED IN 2015


The Financial Conduct Authorities’ (FCA) Retirement Outcomes Review looked at how the retirement income market has evolved since the pension freedoms were introduced in 2015 and focused on consumers who did not take advice. The following key concerns were identified as part of the FCA’s review:

  • Most consumers who did not take advice accepted drawdown from their current provider without shopping around.
  • Consumers might be paying too much in charges, especially given the lack of competition pressures.
  • The vast majority of consumers who had gone into drawdown recently don’t know how their money was invested (others may have just a broad idea).
  • Some providers were defaulting consumers into cash or cash-like assets (which is highly unlikely to be suited for anyone planning to draw down their pot over a longer period of time).
  • Complex, opaque and hard to compare drawdown charges make it harder for consumers compare products and shop around.
  • Lack of significant product innovation for mass-market consumers.

Entering into an income drawdown arrangement at retirement is a big decision which could affect living standards throughout retirement. Good independent financial advice can help you decide if income drawdown is right for you, and help with the investment decisions throughout retirement.

Mark Barr

Independent Financial Adviser