By James Jones-Tinsley, Self-Invested Pensions Technical Specialist, Barnett Waddingham
It flags a worrying trend – that many individuals entering this stage are often making ‘sub-optimal choices’, like withdrawing all their pension funds at outset or remaining in pre-retirement investment portfolios during their retirement.
A ‘retirement sat-nav’
In a press release on 14 May 2025, TPR stated that a ‘retirement sat-nav’ was needed to help savers make more informed decisions and support better outcomes.
The Regulator highlights the need for:
better use of data;
bespoke communications; and
more transparency in post-retirement strategies.
It continues to work closely with both the Department for Work and Pensions (DWP) and the Financial Conduct Authority (FCA), “to create frameworks that promote innovation, and ensure pension savers are properly supported in navigating complex retirement decisions”. Most notably, this includes working with the FCA on its review of the boundary between advice and guidance entitled ‘targeted pension support’, as well as the DWP's proposals for what is being termed a ‘Guided Retirement duty’.
The report, authored by Mariana Garcia Requejo and Melissa Echalier, outlines the following five observations:
The changing retirement landscape demands fresh, forward-thinking support solutions
The ‘Pension Freedoms’, introduced in 2015, has encouraged most pension savers to choose drawdown or cash withdrawals over annuities. However, many make decisions without long-term planning, often withdrawing funds unsustainably and without advice.
This behaviour is especially common among those with smaller pension funds, making them vulnerable to risks like inflation and longevity. As average pot sizes increase in the future, these risks may become more widespread, unless better support structures are put in place.
Default decumulation support structures remain under-developed
While accumulation benefits from defaults like auto-enrolment, decumulation lacks similar frameworks, and many pension arrangements offer no in-scheme income options, leaving members to navigate complex choices alone. Two informal defaults - cashing out or staying in accumulation via drawdown - have become common. Some advocate for accessible, blended default solutions that evolve with savers’ needs, although such models must be carefully designed to accommodate diverse circumstances. This is an area where targeted pension support, and the guided retirement duty could play key roles.
Ambiguity around the advice vs. guidance boundary restricts the availability of tailored support
Currently, pension providers are anxious about offering tailored support, due to regulatory fears of being perceived as providing formal advice. As a result, many retirees lack adequate guidance.
Pension Wise has limited reach and formal advice is often seen as unaffordable. The proposed reforms such as the FCA’s targeted pension support and the DWP’s guided pathways aim to bridge this gap, but their implementation may prove inconsistent, and further clarity is needed to assess their effectiveness.
Without better data and a more unified market, it’s difficult to build a clear picture of saver’s needs
Current data often focuses on individual pension funds rather than holistic saver behaviour, particularly for the period following retirement.
This fragmented picture limits both policymakers’ and providers’ ability to assess VfM or develop tailored interventions. More comprehensive, integrated data collection is needed to inform policy and improve outcomes, and the forthcoming regulatory initiatives provide an opportunity to strengthen the evidence base.
Collaboration on innovation is key to gaining traction and meeting the needs of all savers
Promising innovations include hybrid income strategies, digital tools, and better use of data to tailor retirement support. Providers are exploring solutions that reflect evolving saver needs. However, without co-ordinated efforts from regulators, government, providers, and employers, such innovations risk falling short of delivering widespread improvements in outcomes.
A catalyst for change
TPR’s sponsorship of the PPI Report underscores the value it places on the authors’ proposed solutions. I believe the report could act as a catalyst for change, much like the FCA’s Consultation Paper on targeted pension support, released last December, which has now been followed up with a policy sprint and significant FCA funding.
The long-anticipated Pension Schemes Bill - first announced during last September’s State Opening of Parliament, was introduced to Parliament on 5 June 2025 and includes further details of the DWP’s Guided Retirement duty.
As the shift toward defined contribution (DC) pensions and flexible access continues, retirement decision-making has become increasingly complex for savers. In response, the recent PPI report highlights the need to strike a balance between innovation and protection, calling for the development of seamless, guided retirement pathways. A future VfM framework specific to decumulation may be necessary, and the next phase of research will explore whether the existing accumulation framework could be extended, or if a new model is required.
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