Royal London has launched its Investment Pathways, a series of solutions aimed at non-advised customers moving some or all of their pensions into income drawdown.
To help customers make the right decision the mutual insurer will provide guidance to help them understand the investment pathway that best matches their need. Once they have made their decision they’ll get a yearly reminder and communications inviting them to review their choice and make sure it still reflects their needs.
The pathways are a regulatory requirement introduced as part of the Retirement Outcomes Review. They aim to meet the needs of drawdown customers over the next five years.
While they are primarily aimed at non-advised customers those with advisers can also use them.
Royal London said each solution is mapped to one of its current solution so past performance can be used. Each one is designed to meet the needs of the majority of people using the pathway.
- Investment pathway 1 – for individuals who have no plans to spend their pension savings.
Governed Portfolio 6 (drawdown) – Designed to deliver growth above inflation for a customer who has no short-term plans to access their savings.
- Investment pathway 2 – for individuals who plan to buy an annuity.
RLP annuity fund – Designed to maintain annuity buying power for a customer looking to buy an annuity in the short-term.
- Investment pathway 3 – for individuals already taking, or planning to take a regular income.
Governed Retirement Income Portfolio (GRIP) 3 – Designed to deliver growth above inflation to support sustainable income withdrawal.
- Investment pathway 4 – for individuals who plan to withdraw all their pension savings.
Governed Portfolio (GP) 3 – Designed to offer the potential for above inflation growth while supporting short-term withdrawal needs.
Those using the pathways will be charged under the same tiered structure regardless of which pathway they use (see charges below, which Royal London said, will allow advisers and customers “to consider the most appropriate solution without also having to compare the charges for their choice”.
Lorna Blyth, head of investment solutions at Royal London, said while it was preferable that people approaching retirement sought financial advice “we are aware that many people will not be able to afford to do this. Offering access to good quality guidance and support alongside the pathways will not only help people manage the transition into retirement but also ensure the solution they choose continues to meet their needs throughout their journey.”
Investment Pathway charges
Value of pension savings annual management charge
£0 – £34,500. 0.90%
£34,500 – £69,100 0.50%
£69,100 – £207,000 0.45%
£207,000 – £691,000 0.40%
£691,000+ 0.35%
