The changing landscape of retirement

For a good while, retirement planning had a certain level of predictability to it. Person works for a bit of time, stops working, plans kick in to make a sustained, comfortable retirement, the adviser checks in from time to time. That world, of course, is gone.

There are many reasons spanning structural, legislative, attitudinal, and myriad other adjectives, as well as the more obvious ones like living longer. People are retiring differently now. The tax rules have changed markedly and seismic changes to pensions and IHT are coming next year. Platforms are going to be at the heart of it all, whether they’re ready to be is a different question. 

No more switch on, switch off

According to the absolute legends at HMRC, over 2m adults aged 66 and over are working in some capacity, up 8% over the last five years.

There are plenty of folk staying in work because they want to, for the mental stimulation and for the social connections of the workplace.  Others are working because they have to, as things economically have changed dramatically since Covid. Both groups need plans that reflect where they actually are, rather than where a standard retirement model might expect them to be.

DWP data released last year found nearly a third of people who hadn’t fully retired have now shifted retirement plans even later than they’d planned five years ago. Two thirds of that third cited the cost of living as the main reason. That’s a pretty structural shift from the simpler retirement of yesteryear.

For planners, that means the demand is definitely there for their services, but the plans now are much more nuanced, bespoke, and personalised; the journey is longer, with more twists and turns and a client base continually exposed to information and rumour.

Pensions, IHT and CGT 

Tax planning is at the heart of the retirement planning dinner, but what was a well-versed recipe has had its measurements tinkered with in a major way over the past few years, with more tinkering ahead. Reductions in the CGT allowance mean more clients than ever are affected, and as one adviser told us in State of the Platform Nation 25/26, “… the reduced CGT allowance has meant that every fund switch and withdrawal or Bed & ISA requires a calculation to be done.”

Even though IHT changes to pension assets come into effect in 2027, they’re already reshaping how advisers and clients think about decumulation planning. More are utilising gifting from pensions, increasing the use of onshore bonds and trusts and other interesting strategies like Family Limited Companies.

That’s having some profound effects for platforms. Bond wrapper availability is much broader than it was even 18 months ago, with new trusts being added to existing suites. We’re seeing it reflected in flows on and off platforms too, with record sales into bond wrappers and gifting being reflected in outflows from platform pensions, as well as a sharp increase in advised annuity usage after years in the wilderness.

Enter annuities, again

Annuities are firmly back on the agenda. After years of relatively low usage, mainly due to poorer rates that offered little competition to platform pension drawdown since the introduction of Pensions Freedoms, much better rates are being reflected. Last year was the best year of advised annuity sales since Pensions Freedoms were introduced in 2015.

However, annuities are quite famously inflexible compared to pensions drawdown and that’s where the next evolution comes in, due to all the many reasons we’ve looked at. Longer retirements mean more can change in a client’s life and income needs, from bereavement, divorce or marriage, to helping family or funding at-home or residential care.

There’s a vested interest in this for platforms too, as annuities are almost always off-platform products, which means a good chunk of business – and its associated revenues – moving off-platform too. We’re already starting to see ‘on’ platform version of annuities creeping into platform land.

These hybrid products point to where the market is heading: the best platform retirement outcomes will come from platforms that can accommodate guaranteed, smoothed and drawdown solutions in one place.

Sequencing risk and the markets we’re actually living in

The world is an increasingly volatile place. The opening months of 2025 illustrated this clearly. The trade war anxiety wiped out early gains across advised platform assets before markets recovered. This year we’ve a much more complex situation in the Middle East, and that means clients will need even more reassurance that their plans remain on track.

The platforms that help advisers do that are doing something genuinely useful. The platforms that make it harder are not.

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