Esther Hawley, head of retirement proposition at Standard Life, joins me on The Professional Investment Podcast this week. She chose the challenges facing the Pensions Commission to deliver meaningful reform as her news story of the week.
We discuss how the industry is on the cusp of a new phase – turning the wealth built up in pension pots into a retirement income. The debate about the best way to achieve this goal still rages with different solutions such as CDC and defined benefit discussed.
While DC is often criticised, it allows ownership and personalisation. We talk about how providers are thinking about how to turn these pots into income with investment options becoming more sophisticated than simply switching from equities into annuities.
Investing in growth assets will need to continue for longer with people needing growing assets for decades and there will be a broadening of the asset universe to include different private assets through the journey.
Insurance companies will also be able to manage market risk for individuals by offering smoothed retirement paths but much of the thinking is still in the early stages.
We end the discussion by focusing on ensuring providers maximise retirement income for the median members by improving efficiency at every stage.
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