UK consults on retirement income defaults for pension savers

The Department for Work and Pensions has launched a consultation on proposed Guided Retirement defaults, which would require pension schemes to offer savers approaching retirement an option designed to provide a regular income, potentially for life. The proposals are aimed at people in defined-contribution schemes, where retirement savings accumulate in a pot rather than guaranteeing a set income. The government says around 17 million workers saving into default pensions could be offered the option. Savers would remain free to choose another route, including withdrawing their money. Under the plan, schemes would offer a default retirement option intended to help people turn savings into income without having to make complex financial decisions alone. The government says the approach could reduce the risk of people outliving their savings. Whether the income would be inflation-protected would depend on the arrangement; officials say this may apply in many cases. The Department for Work and Pensions said about 46% of first-time pension-pot accesses in the 2025-26 tax year involved the entire pot being withdrawn. That figure is part of the government’s case for improving support...