Retirement planning fintech Guiide is set to launch the first mass-market guided solution for defined contribution savers at and through retirement.
The new solution provides a “middle ground” option for savers, offering significantly more support than the DIY option at a much lower cost than full ongoing regulated advice.
Savers can build, test and track their plans as well as execute and monitor them over time by sharing the calculated payments from the Guiide plan to a low-cost pension provider. The payments and a length of income matching, selected by the saver, are also provided to an investment manager. The pension pot is then split into three default tailored funds in specific allocations based on the savers plan payments and needs.
Since its launch four years ago, Guiide has catered for savers typically over the age of 50 with pots of around £250,000 or less who are seeking help building a plan designed to last a lifetime. To date, Guiide has been funded mainly by licensing custom versions of its tech to various entities within the industry, which has allowed the consumer site to remain free.
Building on this, Guiide said its latest development offers more support than its free planner but is considerably cheaper than regulated financial advice, which typically costs at least £1,000 at retirement and around 2% of the pension pot, plus underlying products and investments each year through retirement.
The new solution comes as the in-drawdown market is expected to triple from £200 billion to £600 billion over the next decade. Savers face a number of tough financial planning decisions, including how much income to take each year; where to invest their money; how to reduce tax and which provider to use.
Guiide said the available data on the retirement income market suggests many people may be making short-term decisions when withdrawing money from their pots, which could be “storing up problems for the decades to come.”
Main image: tim-mossholder-4P5DMXQXzRI-unsplash
