Markets and Economy
October 2024 MPS Market Review
The Global stock market accrued further gains in October, however, this aggregated statistic belied mixed performance beneath the surface.
1 November 2024
Invesco UK Retirement Study 2024
Explore how innovative solutions reshape retirement income for UK retirees.
This year's key themes
Retirement isn’t what it used to be. The shift from Defined Benefit (DB) to Defined Contribution (DC) schemes and new pension freedoms are reshaping how millions fund their retirement. Our study with NMG Consulting reveals insights from consumers, advisers, and experts, highlighting key opportunities for enhancing guidance and product innovation. To learn more about this year’s retirement study, watch the overview or explore the key themes below.
Invesco UK Retirement Study 2024
Transcript: Georgina Taylor, Head of Multi-Asset Solutions, UK
“I'm delighted to be able to introduce Invesco’s Study on Retirement Income in the UK.
The concept of retirement has transformed over recent decades and so too is the approach to generating retirement income. We've seen this large transition from defined benefit to defined contribution schemes, and that, coupled with the introduction of pension freedoms, has fundamentally altered how millions of people now fund their retirement.
So to better understand these changes and their implications, Invesco has partnered with NMG consulting to conduct an extensive study of the UK retirement income space. Our research combined insights from a combination of consumers at various stages of their retirement journey with financial advisers who are active in retirement planning and senior industry experts.
As you read through the findings, you'll see that obviously challenges exist, but so do opportunities for positive change. And this ranges from facilitating access to guidance or advice, encouraging engagement to driving product innovation. We really are at a pivotal moment where industry efforts can shape a more secure retirement future for all.
At Invesco, we believe we have a responsibility to support the retirement sector as it evolves, whether that's developing innovative decumulation solutions, providing insights to advisors, or fostering industry wide discussions. Our goal is to contribute to a better retirement future.
We invite you to engage with our report and join us in shaping the future of retirement income in the UK.
Look, the challenges are significant, but so too are the opportunities to make a positive impact on the financial wellbeing of current and future retirees. The study highlights numerous insights, but we have grouped these into three high level themes.
So the first one explores how that shift to defined contribution pensions and the introduction of pension freedoms really has altered the retirement journey and the reality of retirement decision making.
The second theme examines how the advice landscape really needs to evolve to address how people access advice or guidance to navigate the retirement income challenges in a defined contribution dominated world.
And finally, theme three investigates how Decumulation solutions need to evolve and the innovation required to meet the changing needs of DC retirees.
Thank you so much for your interest in our retirement study. We hope you enjoy these valuable insights and really look forward to engaging with you to deliver better retirement outcomes in the defined contribution era.”
Theme 1
Navigating pension freedoms: The reality of retirement decision-making
Many retirees struggle with complex income decisions, leading to poor financial choices. This results in low yields, diminished tax advantages, and unnecessary frugality, reducing their overall quality of life.
Transcript
Theme 2
Bridging the retirement advice gap in a DC-dominated world
Early retirement advice helps clients understand options and set realistic expectations. However, rising documentation and compliance costs limit access for lower-wealth clients; targeted support could improve access to guidance.
Transcript
Theme 3
Rethinking retirement income solutions: innovating to meet the evolving needs of DC retirees
There is a need for more retirement solutions offering sustainable income, personalisation, and flexibility. Hybrid solutions can address the need for both guaranteed income and investment growth, while effective default options guide unadvised retirees through decumulation.
Transcript
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Download the study
Investment risk
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The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Important information
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This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. Views and opinions are based on current market conditions and are subject to change.
