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News: Thousands of retirees in drawdown relying on 'blind luck'

16 April 2019

Just a third of retirees in drawdown knew how much income they could generate, study suggests

lifestyle diseases

Thousands of retirees shifting their pensions into drawdown are not taking basic steps to work out how much they can afford to take from their pot, putting them at risk of draining their savings too soon, according to research for Zurich.

Four years on from the introduction of Pension Freedoms, more than 435,000* people have moved their pensions into drawdown.

However, just a third (34%) of retirees in drawdown calculated how much income they would be able to generate from their pot before retiring.

A third (34%) calculated how much money they would need to cover day to day living expenses and, again, just a third (34%) considered how long their money would need to last, be it 20, 30 or 40 years.

Even fewer (22%) calculated how much money they would need to fund leisure activities such as going out for dinner and going on holiday.

Drawdown investment approach

Worryingly, this lack of planning also encompasses retirees’ investment strategy.

Only 16% decided where they would invest their drawdown funds to achieve the desired income, and as few as 17% decided which strategy they would use to withdraw income, be that selling units of investment funds or shares, or living off the dividends and interest and leaving the underlying investments untouched.

Alistair Wilson, Zurich’s head of retail platform strategy, said: “Many retirees in drawdown are relying on blind luck to make their savings last throughout retirement.

“But by taking simple steps to work out how much they can afford to take from their pot, savers can avoid withdrawing too much, too soon. Setting a sustainable level of income in drawdown can be something best done by speaking with a financial adviser, or getting free guidance from Pension Wise.”

It’s not just retirees that this lack of planning will impact; it also has consequences for those set to inherit their wealth.

Just one in five (19%) retirees in drawdown said they had ensured their partner has the financial understanding to continue managing their investments, and only 15% have put a financial plan in place if they or their partner were to pass away.

Alistair Wilson added: “Many people don’t like talking, or even thinking, about themselves or a loved one passing away. However, to pass wealth efficiently and not leave loved ones swamped by complex financial decisions it’s important that those set to receive inheritance are engaged with financial conversations from the outset.” 

By using this RETIRE checklist, savers can check they have the basics covered before moving into drawdown.


Shop around to find the most suitable drawdown provider for your needs.


Calculate your living costs to find out how much you need to live on.


Consider how long you might live for, and therefore how long your pot needs to last.


Calculate how much income you can afford to safely withdraw from your pot.


Think about what you will invest in – with more risk comes bigger returns and a greater potential for loss.


Speak to a financial adviser, or get free guidance from Pension Wise.

*Retirement Income Market Data Bulletin

Research undertaken by YouGov on behalf of Zurich. The online questionnaire was completed by 660 retirees who have entered drawdown and was undertaken between 3-15 October 2018.