Retirement advice has reached an inflection point. Clients are taking on more responsibility for their outcomes just as decisions become more complex, emotional and exposed to policy change.

Our research found that three quarters of advisers say clients misjudge the income they will need in retirement, while nearly half cite tax change as their clients’ biggest concern.

The message is clear: retirement planning must become less about projecting a single future and more about helping clients make confident decisions in an uncertain one.

Research from BNY Investments with NextWealth¹, surveying 207 advisers and 260 advised clients aged 55+, shows the scale of the change.

Traditional pillars still matter: seven in ten (69%) say a guaranteed company pension is important to retirement income, down from 73% in 2024. Workplace pensions have risen from 56% to 65%. This is not just a shift in wrappers. It is a shift in who bears retirement risk.

That risk is landing with advisers now. Nearly half (48%) cite proposed and further tax changes, including inheritance tax (IHT), as the client concern they hear most often. And over three quarters (77%) say IHT policy changes are driving change at their firm.

Clients are also exposed to constant noise: nearly half (41%) say financial news significantly influences retirement decisions, while a quarter have only limited understanding of defined contribution (DC) pensions.

 So what should firms do? First, not treat uncertainty as a one-off. The April 2027 IHT changes make pensions an active planning asset, not simply the last asset to touch.

Advisers should build safeguards that force a pause before clients encash pots or act because a headline has spooked them. That means documenting trade-offs: income need, tax outcome, sequencing risk, family objectives and triggers for change.

 Second, make expenditure the centre of the plan. Three quarters of advisers say clients do not accurately estimate the amount they need in retirement, with nearly half of advisers (46%) saying clients underestimate how much they will need. Yet only a quarter (25%) use tools such as open banking data sharing to support expenditure analysis.

 Firms need repeatable expenditure discovery: essential, lifestyle and contingency spending; gifting capacity; later-life care assumptions; and a review rhythm that updates as clients move from imagined to lived retirement.

 Third, separate retirement risk from accumulation risk. Almost a third (29%) of advisers still use the same attitude-to-risk framework in decumulation; another 51% simply add questions. That may be efficient, but it is not enough.

 Retirement risk is income risk: sustainability, sequencing, inflation, liquidity, longevity and the emotional risk of making irreversible decisions. Suitability letters should show how income will be maintained, which assets fund near-term withdrawals, when guarantees might be introduced and what spending level would breach the plan.

 Fourth, replace product debate with income architecture. This is not a call to default to annuities or drawdown. The evidence points to blending: 35% of advisers regularly recommend lifetime annuities, 23% fixed-term annuities and 32% smoothed funds; 36% use both multi-asset or multi-manager funds and outsourced model portfolio services (MPS).

The better question is not “which product?” but “what job must each component do?” Cash buffers, market exposure, natural income, total return and guarantees all have a role, but that role must be explicit.

Advisers need to be clear that fixed withdrawal rules are only starting points. Almost half (49%) use a fixed rate or range to determine safe withdrawals. Rules of thumb can aid consistency but must not substitute for judgement.

Finally, evidence value. In the past year, over three quarters (78%) of advisers say their firm has made changes in response to the Consumer Duty, and 68% in response to the FCA retirement income review.

The next step is consistency of method, supporting non-uniform outcomes: common questions, common assumptions, common withdrawal governance and clear exceptions help shape unique in-retirement investment plans for clients.

Retirement advice is becoming more technical and more human at the same time. Clients want clarity, confidence and permission; they do not want to act rashly.

Advisers who can provide that, backed by evidence, process and flexible income design, will not just respond to change. They will define what good retirement advice looks like going forward.
 

This article first appeared in Money Marketing, a monthly magazine and website for financial intermediaries in the UK.
 

¹Source: Research conducted by NextWealth for BNY Investments, based on responses to surveys with 207 retirement-focused financial advisers and 260 consumers of financial advice conducted in November 2025.