Jelena Croad: We’re seeing ‘generation DC’ start to retire.
LifeSight has announced its drawdown facility has hit over £1bn in assets, with members increasingly choosing the master trust’s drawdown service to manage their income in retirement.
The scheme – WTW's defined contribution (DC) master trust which has some 430,000 members and over £24bn in assets under management – said that, while the majority of its members are under retirement age, an increasing number were reaching retirement as the DC industry matured.
The master trust said it now has 7,500 drawdown members who have opted to transfer over £1bn of retirement assets into its flexible drawdown solution.
LifeSight UK head Jelena Croad said she was "proud" that thousands of the master trust's members had proactively chosen to stay with the scheme as they reached retirement.
She said: "In the past, many of our members transferred their LifeSight DC pot back into their employer's defined benefit (DB) scheme and used it for their tax-free cash lump sum. Over time, the number of members with legacy DB is falling and we're seeing ‘generation DC' start to retire."
The Pension Schemes Bill – laid before parliament in June – includes provisions that require DC pension schemes to provide a default retirement option for members.
LifeSight said it expected this guided retirement requirement would drive further innovation in the sector – providing even more tailored and effective retirement solutions for members in the coming years.
Croad explained: "The government's new guided retirement provisions are a positive step towards ensuring that all members have access to suitable retirement options.
"The industry is already making positive changes in this space, with options like guided drawdown and later life annuities coming to the fore. We expect decumulation CDC to also be an attractive option. We're speaking to our members and focusing on innovation as we prepare for the new guided retirement provisions to come into effect."
