Post-retirement pathways: drawdown, annuities and lifetime income A fragmented landscape with few members being protected against longevity risk
All 18 respondents make flexible drawdown available, but for one, members are signposted to an external provider (under ‘other’) . ‘Other’ also includes one organisation only making external annuities available through the advice offering; and another prov iding a range of self-select funds designed to meet different desired income profiles. We have a question regarding eight organisations offering “lifetime income product provided by us”. It would appear, supporte d by our interviews, that in some countries ‘lifetime income’ is used to describe a fixed term payment schedule. We think best practic e for these products is to manage longevity risk and so provide “whole -of- life income, but not via an annuity”. We believe a very small numb er of these products exist globally at present.
Few DC systems are yet equipped to deliver income security through the decumulation phase in a standardised or robust way.
n=18
Options funds offer for the post-retirement phase
17
8
8
4
2
1
Flexible drawdown / Account-based pension
Access to annuity provided externally
Access to lifetime income product provided by us
Other
Access to annuity provided by us (affiliated company)
Access to lifetime income product provided externally
60% identified retirement income as the biggest challenge for DC over the next decade
21
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