NATURAL INCOME
IN RETIREMENT
Helping clients meet their income requirements
Putting the pieces together: Using natural income in retirement
Decumulation in retirement has been described as “the nastiest, hardest, problem in finance”1. This may be true, but it is also one of the most interesting and important. Retirement assets account for around 60% of assets under advice2 and are expected to grow as the next generation of retirees become more reliant on invested solutions to support retirement income.
We believe using an approach we call Managed Income can help clients meet their need for stable and growing income while simplifying planning and administration for advisers.
What is natural income?
Natural income is the income investors receive from investments, such as dividends, coupons, interest on deposits, and rental income on real estate.
When held in an investment fund, this income is paid to fund holders. This can either be in the form of regular income distributions for those holding income shares or it can be automatically reinvested within the fund for those holding the fund’s accumulation shares.
The Managed Income approach
Clients using natural income to fund their retirement income will want to know that income is sufficient for their needs - that their income will grow to provide some protection from inflation - and that the income will be predictable. This can only be achieved where the client’s assets are actively managed with income as an objective and payments are structured in a way that meets client needs. We call this the Managed Income approach.
Why Managed Income?
Four reasons why a Managed Income approach could be a good choice for retirement planning:
Aligned with client objectives
The Managed Income approach aims to deliver the income the client needs without having to sell investments. Because we are not selling investments, the client’s capital can be maintained to support future income and/or provide benefits on death.
Helps manage income risk
The Managed Income approach aims to deliver stable and growing income helping to manage the risk that the client suffers a loss of income due to market performance. In particular, because investments do not have to be sold to generate income, we avoid sequence of returns risk. This is the risk that income payments have to be generated by selling assets at depressed prices which will eat into capital and reduce the durability of income.
Keeps more of a client’s assets invested
Where income is funded by selling assets, clients may need to hold a “cash buffer” from which income can be drawn during times of market stress. The Managed Income approach reduces the need for a cash buffer meaning more of the client’s assets can be invested for income.
Payments structured to suit you and your client
Under the Managed Income approach, income payments are structured as 12 equal monthly payments with a final balancing payment at the end of the year. This gives client income in the form they are likely to have been used to while working – a regular salary with variable bonus. It also simplifies planning and administration as the level of regular income is known in advance.
Why choose the BNY Mellon Multi-Asset Income Fund when investing for retirement?
Launched on the 4th of February 2015, the BNY Mellon Multi-Asset Income Fund (MAIF) follows a Managed Income approach. It is actively managed and directly invested, giving BNY Investments Newton investment team full flexibility in choosing assets to achieve the Fund’s income and growth objectives.
MAIF pays income as 12 equal monthly payments from August to July with an additional balancing payment in July. The level of monthly payment is reviewed in July each year with the new payment level applied from the August payment.
MAIF has provided a growing regular income since launch and has grown total income every ‘fund year’ apart from a small decrease in 2019/20 when Covid hit.
MAIF can be used to provide all or part of a client’s income in retirement. It can also be used pre-retirement with income reinvested to boost future income payments. This allows the client to see their income potential grow and, when needed, the income can be taken by the client rather than reinvested.
1 William Sharpe
2 “Retirement Advice in the UK: Time for change?” BNY Investments and NextWealth, November 2025
The value of investments can fall. Investors may not get back the amount invested. Income from investments may vary and is not guaranteed.
Important Information
BNY Mellon Multi-Asset Income Fund
The fund can invest more than 35% of net assets in different Transferable Securities and Money Market Instruments issued or guaranteed by any EEA State, its local authorities, a third country or public international bodies of which one or more EEA States are members.
Investment objective, benchmark, annual performance & key risks
Objective: To achieve income together with the potential for capital growth over the long term (5 years or more).
Benchmark: The Fund will measure its performance against a composite index, comprising 60% MSCI AC World NR Index and 40% ICE Bank of America Global Broad Market GBP Hedged Index, as a comparator benchmark (the "Benchmark"). The Fund will use the Benchmark as an appropriate comparator because the Investment Manager utilises this index when measuring the Fund's income yield. The Fund is actively managed, which means the Investment Manager has absolute discretion to invest outside the Benchmark subject to the investment objective and policies disclosed in the Prospectus. While the Fund's holdings may include constituents of the Benchmark, the selection of investments and their weightings in the portfolio are not influenced by the Benchmark. The investment strategy does not restrict the extent to which the Investment Manager may deviate from the Benchmark.
Performance - 12 months returns (%)
| Jun 2020 Jun 2021 |
Jun 2021 Jun 2022 |
Jun 2022 Jun 2023 |
Jun 2023 Jun 2024 |
Jun 2024 Jun 2025 |
|
| Fund | 20.59 | 2.95 | 3.31 | 7.56 | 7.05 |
| Performance Benchmark | 14.14 | -6.46 | 5.88 | 13.05 | 6.65 |
Calender Performance (%)
| 2020 | 2021 | 2022 | 2023 | 2024 | |
| Fund | 4.07 | 11.53 | 0.63 | 3.30 | 4.54 |
| Performance Benchmark | 10.53 | 10.73 | -10.21 | 11.39 | 12.44 |
Source: Lipper as at 30 June 2025. Fund performance Institutional Shares W calculated as total return, including reinvested income net of applicable UK tax on net asset value. All figures are in GBP terms.
Past performace is not a guide to future performance.
Objective/Performance Risk: There is no guarantee that the Fund will achieve its objectives.
Performance Aim Risk: The performance aim is not a guarantee, may not be achieved and a capital loss may occur. Funds which have a higher performance aim generally take more risk to achieve this and so have a greater potential for returns to vary significantly.
Derivatives Risk: Derivatives are highly sensitive to changes in the value of the asset from which their value is derived. A small movement in the value of the underlying asset can cause a large movement in the value of the derivative. This can increase the sizes of losses and gains, causing the value of your investment to fluctuate. When using derivatives, the Fund can lose significantly more than the amount it has invested in derivatives.
Changes in Interest Rates & Inflation Risk: Investments in bonds/ money market securities are affected by interest rates and inflation trends which may negatively affect the value of the Fund.
Credit Risk: The issuer of a security held by the Fund may not pay income or repay capital to the Fund when due.
Counterparty Risk: The insolvency of any institutions providing services such as custody of assets or acting as a counterparty to derivatives or other contractual arrangements, may expose the Fund to financial loss.
Currency Risk: This Fund invests in international markets which means it is exposed to changes in currency rates which could affect the value of the Fund.
Credit Ratings and Unrated Securities Risk: Bonds with a low credit rating or unrated bonds have a greater risk of default. These investments may negatively affect the value of the Fund.
Charges to Capital: The Fund takes its charges from the capital of the Fund. Investors should be aware that this has the effect of lowering the capital value of your investment and limiting the potential for future capital growth. On redemption, you may not receive back the full amount you initially invested.
Shanghai-Hong Kong Stock Connect and/or the Shenzhen-Hong Kong Stock Connect ("Stock Connect") risk: The Fund may invest in China A shares through Stock Connect programmes. These may be subject to regulatory changes and quota limitations. An operational constraint such as a suspension in trading could negatively affect the Fund's ability to achieve its investment objective.
China Interbank Bond Market and Bond Connect risk: The Fund may invest in China interbank bond market through connection between the related Mainland and Hong Kong financial infrastructure institutions. These may be subject to regulatory changes, settlement risk and quota limitations. An operational constraint such as a suspension in trading could negatively affect the Fund's ability to achieve its investment objective.
CoCo's Risk: Contingent Convertible Securities (CoCo's) convert from debt to equity when the issuer's capital drops below a pre-defined level. This may result in the security converting into equities at a discounted share price, the value of the security being written down, temporarily or permanently, and/or coupon payments ceasing or being deferred.
Investment in Infrastructure Companies Risk: The value of investments in Infrastructure Companies may be negatively impacted by changes in the regulatory, economic or political environment in which they operate.
High Yield companies risk: Companies with high-dividend rates are at a greater risk of not being able to meet these payments and are more sensitive to interest rate risk.
A complete description of risk factors is set out in the Prospectus in the section entitled "Risk Factors".
DOC ID: 2449900 Expiry: 6 May 2026
