The Investment Association, the fund managers' trade body, has called on the financial services sector to work towards greater engagement with their clients' retirement choices and to build a stronger focus on retirement outcomes.

The trade body has launched an Investing for a Better Retirement paper, with four key recommendations to improve access to high-quality, sustainable retirement income solutions for UK savers.

The paper recommends: an enhanced support framework for non-advised DC investors; supporting advisers to further improve outcomes for client from retirement income advice; ensuring Value for Money (VfM) in retirement and reforming the UK authorised fund rules to deliver retirement-income oriented products.

IA’s four recommendations in detail:

Deliver an enhanced support framework for non-advised DC investors

• Develop ‘targeted support’ to guide savers to good outcomes. For those accumulating DC wealth and not seeking regulated financial advice, Targeted support will be critical in guiding them to good retirement decisions and outcomes.
• Provide a backstop retirement income solution for those opting out of targeted support.

Support advisers to further improve outcomes for client from retirement income advice

• Encourage advisers to consider a client’s attitude to risk and capacity for loss in retirement, focusing on income stability and inflation protection, the key objectives for delivering retirement income.
• Develop risk metrics for retirement investment products that are better aligned with retirement income objectives.

Ensure Value for Money (VfM) in retirement

• Ensure the retirement income market has a value-focused mindset embedded in the marketplace.
• If the forthcoming DC VfM framework is applied to retirement income in future, it should be adapted to reflect income-focused performance and value metrics.

Reform the UK authorised fund rules to better enable investment managers to deliver retirement-income oriented products

• Allow UK authorised investment funds the ability to both distribute capital to supplement income and retain income across accounting periods to allow them to deliver a smoother income to investors
• Ensure retail distribution rules support the delivery of retirement income focused investment strategies, permitting the use of a broad investment toolkit.
• Investment managers should facilitate the role of private assets in portfolios to and through retirement.

Imran Razvi, senior policy adviser at the Investment Association, said: “Ten years after their introduction, the pension freedoms continue to offer DC pension savers the ability to tailor the use of their pension wealth to their retirement goals. However, the same freedom means these individuals face a complex series of choices over how to generate income.

"As more people retire increasingly reliant on DC wealth, the need for informed, long-term planning and support has never been greater.  Ensuring people – whether advised or non-advised – have access to appropriate support and flexible, value-for-money retirement income solutions, is paramount.”

He said that retirement isn’t a one-size-fits-all journey “and today’s savers need the tools, support, and investment options to match that reality. The financial services industry must work collectively to build stronger engagement with retirement planning, deliver more consistent support, and implement smarter regulation to empower the industry to deliver better outcomes for UK savers.”