Multi-asset class takes the crown in drawdown market boom
30 Aug 17
While the number of retirees opting for drawdown has more than trebled since the introduction of the pension freedoms, retiring investors are choosing funds with long-term investment targets to meet near-term income needs, research from Dutch insurer and pension provider Aegon shows.
The retirement income market has changed dramatically in the two years since the pension freedoms launched.
Drawdown, in particular, has become the most popular option for retirees growing from 15% of retirement income sales in Q3 2013 up to nearly half (46%) by Q3 2016. But, according to new figures from Aegon, drawdown investors are sticking with familiar strategies and well-known fund choices, rather than newer, more tailored drawdown solutions.
“Drawdown’s popularity has rocketed since the pension freedoms, but retirees’ investment choices are still adjusting to the needs of those that choose to remain wedded to the markets in retirement,” said Nick Dixon, Investment Director at Aegon.
“As a result, there is a mis-match between the long-term growth objectives of many of the strategies being used, and the near-term income needs of retirees who use them. Retirees are also now more exposed to market highs and lows than they have ever been.”
Click through for the key points of Aegon’s research.
Tags: Drawdown
