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Investor Behaviour in the Freedom of Choice Pensions Market

The changes in regulation from April 2015 have increased access to retirement savings, while auto-enrolment has increased the number who will be accessing savings in future. Such decisions will be amongst the most important financial choices that many will make during their lives.  

This Review Paper discusses the response to these changes and explores issues thrown up by this greater flexibility – particularly given the large amounts of uncertainty around an individual’s long term spending requirements. We highlight the increased number of features offered by the range of new or evolved products available to investors.

Decisions on using retirement savings are not taken in isolation; other assets and sources of income should also reflected. We introduce a possible aid in the form of an 'Balance Sheet Approach' combining assets/wealth, income and expected outgoings in a single, comprehensible form and conclude with suggested next steps to build on the work and findings to date.