Retirement income, all joined up

Creating a reliable, sustainable income can be challenging – here’s something to help

Using accumulated savings to create a sustainable lifetime income, whilst preserving access to capital, is a primary objective for many retiring clients¹ However, we understand it can be challenging for you to reliably achieve this in all market cycles.

It’s likely that the financial challenges many clients at retirement now expect to face have changed from when they made their initial plans. For example, twenty years ago life expectancy was 78 years for men, and 82 years for women.²

Today, men aged 65 have a 43% chance of living to age 90 – and for women, it’s 53%.³ Life expectancy is however just an average. In many cases you’ll plan for clients living much longer – perhaps 35 years in retirement – particularly if they’re a non-smoker in good health³.

Deciding how much to spend each year in retirement is complicated when the retirement length and asset returns are unknown. Running out of money is the concern financial advisers hear most from clients when transitioning from saving to spending in a way that balances security with everyday enjoyment.³

And perhaps in reaction to this, we’re witnessing significant market growth for guaranteed income products which offer a reliable income for life to help cover essential expenses. The latest figures from the ABI show 2024 sales increased by 34% – reaching a ten-year high.4

The fear of outliving savings may lead to a spending reluctance amongst retiring clients. A 2024 study found that retirees only spend around 75% of what they could actually afford5. With cost-of-living increases, unknown life expectancy and geopolitical uncertainty, you may find some clients increasingly reluctant to spend retirement savings on what they might consider luxuries such as holidays.

This creates the challenge of producing a retirement income strategy that offers greater income certainty, with the flexibility to adapt retirement plans as clients’ needs change.

You may have tried blending an annuity and drawdown plan to solve this puzzle for clients, but found it an unsatisfactory experience.

We understand the demand for a better way, which is why we’ve launched our new Guaranteed Lifetime Income plan – an easy-to-implement, straightforward solution designed to offer clients flexibility with certainty.

Offer flexibility with certainty together in one place

Our Guaranteed Lifetime Income plan is now available on the Fidelity Adviser Solutions platform and held within a Flexi-access Drawdown Account, alongside clients’ other drawdown investment solutions. Income is paid from the Plan to the Product Cash account, enabling you to manage a client’s retirement income in one place – providing the flexibility that many clients want, with the certainty of guaranteed income for life.

Any income from the Plan that isn’t needed for withdrawal can be held in a client’s Product Cash account or re-invested within their Flexi-access Drawdown Account. The client won’t be liable to income tax until they withdraw income into their chosen bank account.

Our Plan, integrated on platform, provides income security for you to satisfy the primary needs of your clients – while mitigating their longevity risk. And it allows you to maintain the investment and withdrawal flexibility that’s needed to help clients adapt their retirement plans.

This helps you build resilience into clients’ retirement income strategies and withdrawal profiles and allows clients to enjoy the best of both worlds. They’ll have the reassurance of a predictable income stream to help cover their essential spending – and the ‘license to spend’ on discretionary things like hobbies, and memorable experiences.

The Standard Life Guaranteed Lifetime Income plan

Visit our website to find out more on delivering a secure, sustainable income for your clients.

Sources:
1. BNY in partnership with NEXTWEALTH, ‘RETIREMENT ADVICE IN THE UK: TIME FOR CHANGE? Revisiting
retirement strategies amid changing regulation, markets and client needs’, November 2024 | Issue 7
2. Office for National Statistics, Average Life expectancy at birth: by sex and country, 2006-08 to 2010-12, accessed
SPRING 2025
3. JP Morgan, 2025 Guide to Retirement, Life expectancy probabilities, 4th SPRING 2025
4. Association of British Insurers, 2025
5. DAVID BLANCHETT AND MICHAEL FINKE, GUARANTEED INCOME: A LICENSE TO SPEND, Retirement Income
Institute Original Research-#028-2024, JUNE 2024.