Greater consideration needed for retirement glide path


retiredThe most radical pensions overhaul in nearly a century has arrived and whilst the changes are a positive way forward for retirees, the increase in flexibility and choice has also brought more challenges than ever before for employers and employees alike. An area which is a cause of concern is that employees need to give greater consideration to their retirement ‘glide path’; that is, how their pension savings are invested in the years leading up to retirement.

Jonathan Watts-Lay, Director, WEALTH at work – a leading provider of financial education, guidance and advice in the workplace comments, “I believe employees need to look at their glide path at least 10 years before their anticipated date of retirement as this should be in line with their planned method of generating a retirement income. Whether an employee is going to take their whole pension fund as cash, buy an annuity, go into drawdown or a combination of some or all of these, their glide path should be appropriate for their needs.”

He adds “Of course, some may want to purchase an annuity and already be on a glide path suitable for this but for those that want to go into drawdown, they could be heading towards retirement not knowing the implications of being on the wrong glide path. And if this is the case, employees will need financial education in order to understand this and to help them to have confidence about what they should do next to make their selections. Whatever their needs, they need to constantly review this over the 10 years as things may change.”

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