While it was previously compulsory for those in drawdown to annuitise by 75, they may now continue in drawdown, although this may be fairly high risk for some clients.
Other options
Retirement planning is a whole picture rather than one product. Many clients, for example, will have defined benefit schemes in place which must be accounted for in overall planning. And, in some cases, a purchased life annuity may be part of the picture.
According to Richard Jones, annuity and protection director at Scottish Widows, equity release is also on the up to supplement incomes.
“A market that is growing is equity release,” he says. “That is good news because a third to 40 per cent of all of the assets that customers have when they retire are non-pension assets and most of that is in property.”
Even if not technically a retirement income product - it is in fact regulated under mortgage rules and advisers are required to hold specialist qualifications - equity release is increasingly being used for that purpose.
A niche option to generate income is scheme pension. Likely to only be suitable for members of a Ssas or a family Sipp, it can be helpful in pots close to the lifetime allowance as benefits are measured on their way out rather than on the way in.
With retirement planning at the forefront of many adviser businesses, finding the right solutions is becoming increasingly important. In some cases, one product will do the job; in others, a combination will be most effective. But the retirement planning universe goes beyond basic annuities and drawdown, something more advisers are cottoning onto.
Further reading:
Guide to income drawdown and third-way products
This article is sponsored by Scottish Widows. The editorial content is independent.
