Retirement Income Report

Published / Last Updated on 14/07/2017

Retirement Income ReportRetirement Income Report.

The Financial Conduct Authority (FCA) has this week revealed its findings following a review of the ‘at retirement’ market following the introduction of flexible pension drawdown options in April 2015.


  • Accessing pension pots early has become ‘the new norm’.
  • Almost three quarters (72%) of pots that have been accessed are by consumers under 65. Most are choosing to take lump sums rather than a regular income.
  • Over half (53%) of pots accessed have been fully withdrawn. However the fully withdrawn pots are mostly small with 90% below £30,000.
  • 94% of consumers making full withdrawals had other sources of retirement income in addition to the state pension.
  • Drawdown is now twice popular as buying a secured annuity income.

Key Issues:

  • 52% of drawdown pots were moved into other savings or investments and not spent. Possibly result in paying too much tax, missing out on tax efficient growth or losing benefits.
  • Most people with small pots do not ‘shop around’.
  • 30% take drawdown without advice.  Prior to the new rules only around 5% did so without advice.
  • The annuity market is shrinking and there is little or product innovation.

Possible Action by the FCA

  • Additional protection measures for people who take drawdown without advice.
  • Investigating high charges and unsuitable investment strategies.
  • Make it easier to compare drawdown plans
  • Access to lump sum only without making any drawdown transfer decisions or transfers
  • More guidance and tools to enable consumers to be better information on their retirement options


Decisions at retirement or drawing down pension benefits are decisions that affect the rest of your life and should not be taken lightly.  We welcome any assistance the FCA can offer to help consumers.