Drawdown savers risk running out of pension income
Less than half of people using income drawdown to access their pension pot have a high chance of that income lasting them for the rest of their life, analysis by Royal London has shown.
Data from Royal London's drawdown governance service shows that 47% of drawdown customers have a more than 85% chance of their income lasting them for life.
Conversely, the other 53% have a higher risk of running out of income.
Drawdown is a feature offered by some pensions, which allows savers to draw a post-retirement income from the assets held in their pension.
This offers the potential for investment growth, but it also means investments can fall in value as well as rise, and are not guaranteed for life.
According to separate research by FTAdviser, this is the most popular way for people to access their retirement savings.
Lorna Blyth, head of investment solutions at Royal London Intermediary Pensions, said:
"For some income drawdown customers income sustainability is not so important as they have high capacity for loss.
"For others it is extremely important that they understand the risk around potentially running out of money."
Speak to us about your retirement planning.