Rachel Vahey: Why pension lifestyle funds are from a bygone era

Days gone by

clock • 3 min read

Now most people approach retirement with the intention of entering drawdown rather than purchasing an annuity, writes Rachel Vahey, lifestyle funds that derisk investment portfolios are not appropriate default options for customers...

The non-workplace pension market is a myriad of different types of pensions and different types of customers. With such variety, it is difficult to come up with solutions that will meet all needs. One part of the Financial Conduct Authority (FCA) recognises this. In its plans to introduce a new Consumer Duty for FCA-regulated firms, it's moving to a principles-based style of regulation, asking firms to meet the needs of their target customer groups. But its plans for all providers to offer new non-advised savers in a non-workplace pension a default fund seems to go against this direction...

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