Transitions to Retirement: Myths and rules of thumb in retirement income

‘Myths and rules of thumb in retirement income’ is the second stage of a two stage major research report, sponsored by State Street Global Advisors, and part of the PPI’s Transitions to Retirement research series. 

This stage of the research considers how rules of thumb might help retirees to think about and manage their DC pension savings. At a roundtable, attendees discussed what ‘rules of thumb’ are, how they differ from received wisdom and how they might support DC savers when setting their strategies for retirement. Without effective defaults or financial advice there is the risk that DC savers will not always act in their best interests (although they may think they are) by following what others say or what they perceive to be accepted wisdoms and facts. In such situations, rules of thumb can help by providing a guide or as a target that individuals can aim for.

The PPI Transitions to Retirement series explores how people access pension savings. The series as a whole is sponsored by Age UK, Fidelity, Partnership, State Street Global Advisors, The Investment Association, The Pensions Advisory Service (TPAS), The Pensions Regulator (TPR) and The People’s Pension.

Chapter one provides an overview of the definition of a rule of thumb, and its possible application in retirement.

Chapter two considers the extent to which two specific rules of thumb might help individuals to manage their retirement income under the new pension flexibilities; '4% withdrawal' and 'secure a basic income to meet essential needs'.

Chapter three considers some of the received wisdoms that may prevent an individual making the most of their retirement income; 'better returns can be achieved by investing in property' and 'I can find somewhere better or safer for my money'.

Chapter four uses the findings to draw some conclusions from this research for the pensions industry. 


To download the report, please click here.  

To download the executive summary, please click here

To download the modelling appendix, please click here.

For information on the press release, please click here.


Executive Summary