Pension Freedom  

Guide to retirement income pathways

  • Describe how the retirement journey has changed since pension freedoms came in.
  • Identify the right choices to make in accumulation and in decumulation.
  • List how to make sure clients in drawdown have enough cash.
Guide to retirement income pathways


Many clients envisage a retirement filled with enjoying the things they did not have time to do while they were working.

Whether this is taking trips out with their grandchildren, spending more time and money on maintaining their property, or taking a couple of holidays a year, maybe a cruise somewhere with a warmer climate, or a stay in a UK holiday cottage.

But being able to afford this kind of lifestyle in retirement, on top of the usual weekly and monthly outgoings, has become a lot more challenging now that clients are faced with so many funding options in retirement. 

Helping clients plan for retirement has become a vital part of an adviser's job, as pension freedoms removed the obligation to simply buy an annuity to see them through their later years.

But the worry is that many people will underestimate just how much they need to save in order to have the retirement lifestyle they want, and to not outlive their pension pot.

Recent research by Close Brothers reports that 46 per cent of UK workers aged 55 and over do not feel prepared for their retirement. 

The Close Brothers Financial Wellbeing Index reveals that 31 per cent admit that funding their retirement is one of their top three money worries, rising to 45 per cent among those aged 55 plus, who are approaching their retirement.

This guide will look at what has changed for advisers and their clients since pension freedoms in 2015, as well as how to make the right choices in both accumulation and then the decumulation phase.

Finally, it will consider how to ensure clients do not run out of access to cash in drawdown.

The guide is worth an indicative 60 minutes of CPD.

Contributors to this guide are: Vince Hughes-Smith, head of business development at Prudential; Billy Burrows, retirement director at Better Retirement Group; Heather Owen, financial planner at Quilter Private Client Advisers; Colin Simmons, retirement income expert at Prudential UK; Patrick Connolly, chartered financial planner at Chase De Vere; Steve Pennington, head of wealth planning at Arbuthnot Latham; Ricky Chan, chartered financial planner and director at IFS Wealth; Mihir Kapadia, chief executive of Sun Global Investments; Nathan Harris, a chartered financial planner at Lothbury Group; Sir Steve Webb, director of policy at Royal London; Kate Smith, head of pensions at Aegon; Close Brothers.

Ellie Duncan is a freelance financial journalist

In this guide


Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. According to Mr Hughes-Smith, what is the critical question?

  2. Royal London research suggests someone on average earnings needs to aim for a pension pot of what size, in order to have a comfortable retirement?

  3. Mr Pennington says current auto-enrolment rates will generate an income of around how much of the average wage?

  4. Mr Kapadia identifies four options for clients at decumulation. Which one of the below is not in his list?

  5. On top of a secure level of income, there is the income clients want to retire on. What is this called?

  6. Ms Owen says: "“When in accumulation, investors have the capacity to absorb volatility to varying degrees, depending on their circumstances." True or false?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe how the retirement journey has changed since pension freedoms came in.
  • Identify the right choices to make in accumulation and in decumulation.
  • List how to make sure clients in drawdown have enough cash.

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