• Retirees face dilemma as they look to balance income security with flexibility in later life
  • 90% of people want a guaranteed income in retirement, while 80% value freedom to access their pot when they wish

Striking the balance between securing a guaranteed income and flexible access to pension savings remains a significant dilemma for pension savers. In response Standard Life has developed Mixed Income Builder - a dedicated tool to allow pension savers to explore ways to combine guaranteed income and flexible income as they plan for their retirement. The free to all tool allows pension savers to consider their essential spending needs and then, using the PLSA’s ‘minimum’ Retirement Living Standards1 as a guide, explore other levels of guaranteed income required to meet them.

Using the state pension and other guaranteed benefits, such as defined benefit (DB) pensions, the Mixed Income Builder shows the cost of guaranteeing an income via an annuity, and what might remain in the pension pot for flexible or discretionary spending throughout retirement.

The launch comes as Standard Life’s Retirement Voice2 report reveals that 90% of people still want a guaranteed income in retirement despite the effective requirement for most people to buy an annuity being removed in 2015 with the introduction of Pension Freedoms. This may indicate that there is a fundamental desire for financial certainty in retirement, which perhaps is unsurprising given the challenges many people have faced in recent years.

Yet, 80% of respondents also wish to maintain the flexibility and freedom to access their pot of money as their needs change.

Gail Izat, Managing Director of Workplace and Retail Intermediary for Standard Life, part of Phoenix Group, said: “The increased flexibility brought about by pension freedoms has also increased complexity for pensions savers, many of whom struggle to decide how best to secure an income when they retire. For most it’s been all or nothing - either buy an annuity to provide certainty or choose flexibility. Flexibility offers people the freedom to access their money when they want or need it, but pots can fluctuate in value and with choice comes the responsibility of deciding how to best manage that money through a retirement that could last many decades.

“But the choice doesn’t have to be binary. A combined approach involving both annuities and drawdown can offer those in retirement a combination of income certainty and flexibility. In reframing how we talk to savers about retirement options we are encouraging people to think about their spending needs in retirement in combination with the level of guaranteed income they’ll need. We know that if people understand what their income options could look like in retirement, it builds confidence to plan for a more financially secure future.”

The Standard Life Mixed Income Builder provides savers with insight to understand:

  • If they’re able to reach the minimum income needed each year to cover their essential costs
  • If they could convert some of their pension savings into a guaranteed income for life
  • How they could adjust and increase their income beyond the minimum level
  • How much pension savings they might have left to take flexibly, whenever they want

Mixed Income Builder is free to access on the Standard Life website.

ENDS

 
Media enquiries

For further information, photos, video content or interviews, contact:

Darragh Leeson/James Merrick
Senior PR Manager/PR Manager
Standard Life, part of Phoenix Group
07707 270001 / 07974 063067
darragh_leeson@standardlife.com / james_merrick@standardlife.com

 

Notes to editors

1.The Pensions and Lifetime Savings Association has calculated how much it costs a single person to achieve various standards of living in the UK.

The minimum should be enough to cover all your needs with some left over for fun and social occasions

Find out more at www.retirementlivingstandards.org.uk

2.Standard Life’s Retirement Voice Report 2024 Retirement Voice | Standard Life

 

About Standard Life 

Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years.

Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.

Standard Life is part of the Phoenix Group, one of the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together.

Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.

We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about.

The value of investments can go down as well as up, and may be worth less than originally invested. 

 

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