Our response to the DWP's CDC Consultation
We agree that there is a need for innovation in Defined Contribution (“DC”) to deliver products that meet members’ needs better. We support the intention to create a whole of life pension approach that targets stable income in retirement and we argue that this should be the default choice. This will help many consumers in retirement by removing uncertainty and addressing the risk of either outliving their savings or having to be too restrictive in their spending during retirement.
The outstanding question is whether a new regulatory regime is needed to achieve this. Combining a DC solution in the build-up phase with a variable annuity in the pay-out phase will achieve this objective – in short, we don’t think a new regulatory regime is required.
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