TPT Retirement Solutions has launched a new post-retirement offering for its defined contribution (DC) master trust members, as the government prepares to legislate for default decumulation services.
The “income for life” product – described by TPT as “first of its kind” – will allow members to convert their pension pots into a sustainable, inflation-linked income.
TPT will calculate and pay regular drawdown amounts, managing the level of withdrawals so that a member’s pot lasts until they are 95 years old. At this point, the strategy aims to leave two to three years’ worth of payments in the member’s drawdown account.
There is also an option for withdrawals to last until age 75 if an individual plans to buy an annuity in later life.
The new offering is designed to simplify retirement income planning for savers, TPT said, and to provide an easy-to-use alternative for members who do not want to make investment decisions, carry out complicated calculations, or seek financial advice.
TPT research carried out last year found that just 35% of pension savers felt confident making basic retirement decisions, such as how to access their pension. Despite this uncertainty, 79% did not plan to seek professional financial advice.
“The lack of confidence among pension savers in making retirement decisions… creates significant risk for individuals’ financial futures.”
Philip Smith, TPT Retirement Solutions
More than two thirds (68%) of respondents said they were interested in a default drawdown-style product, TPT found.
Philip Smith, DC director at TPT Retirement Solutions, said: “The lack of confidence among pension savers in making retirement decisions – coupled with an aversion to or the affordability of taking financial advice – creates significant risk for individuals’ financial futures.
“Our new solution aims to bridge this gap. By offering a default pathway into drawdown, backed by digital tools and flexible options, we’re empowering members to make informed, confident decisions – without needing to become financial experts.”
The new offering comes after the government’s Pension Schemes Bill was published last week, which includes legislation requiring DC schemes to offer “default pension benefit solutions”.
David Lane, chief executive officer at TPT Retirement Solutions, said post-retirement innovation was “long overdue” and offering a decumulation option needed to be a “central focus if we want to improve retirement outcomes”.
The new offering “reflects our belief that retirement income should last for life, respond to inflation, and be easy to access without expensive advice”, he added.
The development follows the company’s announcement last month that it was actively exploring launching a collective DC pension scheme.
