Drawdown danger: how to avoid the post-Budget pitfalls
Stuart’s article in New Model Adviser reflects on the Budget’s retirement reforms: “With drawdown the personal consequences and regulatory risks of getting it wrong are high. However, advisers should not expect to rely on a readymade solution. On paper it might look like the solutions will be institutional, as life companies replace annuities with a product in which the rate of draw is a managed outcome.
This is the sort of solution the Department for Work and Pensions prefers, hence it is backing collective defined contribution plans in which both investment and longevity risks can be pooled.
But this misses the point that funding retirement spending is a process not a product. Besides, after with-profits nobody really trusts investment risk pools”