Retirement income: Why the '4% rule' does not work for the UK

In October 1994 Bill Bengen published his paper summarising a number of empirical simulations of historical market behaviour to attempt to identify a percentage of a pension that could be drawn down each year as income without fear of the money running out. It was later branded the ‘Safemax Rate' and was set at 4% per annum. Bill is a smart cookie – his undergrad degree was in aeronautics and astronautics from MIT in Boston and he co-authored Topics in Advanced Model Rocketry. (Ergo, without exaggeration he's a rocket scientist).  When he was 40 he moved to southern California and set up...