Retirees need to take a ‘mix and match’ approach to retirement income planning, a whitepaper by WealthTech company GBST has revealed.
It showed that changes in regulation, longevity, wealth and retirement norms have reshaped the income needs of retirees.
According to the study, this means advisers and investors need to place greater emphasis on guaranteed income solutions as well as flexibility of income drawdown when retirement planning.
GBST added that more innovation is required to “fully embrace” the opportunities offered by combining annuities and flexi access drawdown – as well as other products – as it believes this can help an individual to achieve their retirement income needs while optimising tax and death benefits.
David Simpson, head of EMEA at GBST, said: “We have no doubt that the various pressures shaping people’s future retirement income needs, alongside the economic impact of rising interest rates and annuity rates, will drive innovation within the annuity market.
“We expect to see more products where guaranteed income is paid into a pension wrapper and drawn by the consumer to meet varying needs and tax positions. When these solutions sit alongside other retirement planning products such as ISAs, investment bonds and flexi access drawdown, guaranteed income products start to look like a much more attractive option for advisers and their clients, and will become a key component of many retirement plans.
“For providers, administering flexible retirement solutions and other retail investment products on the same technology and across the same operational teams and processes also drives down costs, while improving the service and experience they can deliver to advisers and end-investors.”
