Taken together, these reforms represent a real opportunity to reset the way members are supported as they approach and move through retirement.
The problem we need to solve
Today’s retirement landscape is complex. Adequacy remains a major challenge, particularly for renters who face higher income needs in later life. At the same time, members are asked to make decisions that are often highly technical and difficult to navigate without support. Retirement outcomes vary widely, and the advice gap persists.
The shift towards guided retirement and targeted support aims to address this by ensuring members are not left to face these challenges alone. Instead, they will have access to meaningful pathways, tailored guidance, and default safety nets.
What’s changing by 2027/28
The Pension Schemes Bill will require trustees to either:
- Offer in-scheme default decumulation solutions, or
- Partner with a master trust or FCA-authorised provider.
These solutions must provide members with a regular income in retirement and reflect members’ circumstances and needs. Importantly, the FCA’s work on targeted support will sit alongside this, giving providers scope to use limited personal data to design helpful, affordable interventions for groups of consumers bridging the gap between generic guidance and regulated advice.
Designing pathways that work for “people like you”
Both guided retirement and targeted support are underpinned by the principle of “people like you.” This means segmenting members into cohorts based on characteristics we know, using available data, and creating communications and pathways that are relatable and effective.
Members must still have genuine choice, but also the confidence that where no active choice is made, there is a safe and suitable default to fall back on. This blend of choice and protection will be key to better outcomes.
Longevity risk and the investment challenge
Planning for retirement would be easier if we all knew how long we would live. Longevity risk remains one of the toughest issues to solve, particularly for those with little margin for error, such as renters. Solutions must mitigate this risk while also recognising that retirement is rarely a single “cliff edge” event.
From an investment perspective, the challenge is to maintain exposure to growth assets for longer, while managing volatility and creating resilience. We should be open to innovation, from partial annuities and guarantees to collective approaches such as CDC, while balancing cost against long-term value.
Digital expectations and human touch
Today’s members are accustomed to seamless digital journeys, from banking apps to food delivery. Many will want the same experience from their pension provider. But not everyone will feel comfortable making life-changing financial decisions online. Guided retirement must reflect this by offering blended support – easy-to-use digital journeys complemented by opportunities for human interaction when it matters most.
The pace and scale of regulatory change ahead can feel daunting. But this is also a genuine opportunity for trustees, providers, and regulators to collaborate on reshaping the retirement journey. By combining data-driven insights with innovative products and clear governance, we can move towards a system that delivers adequacy, flexibility, and sustainability for members.
Guided retirement and targeted support are not simply compliance exercises – they are tools to transform outcomes. This is our chance to reimagine how savers experience retirement, and to ensure that support is purposeful, personalised, and built to last.
Kim Nash, Managing Director – ZEDRA
