Putting the pieces together: Using natural income in retirement
Decumulation in retirement has been described as “the nastiest, hardest, problem in finance”* . This may be true, but it is also one of the most interesting and important. Retirement assets account for around 60% of assets under advice** and are expected to grow further as the next generation of retirees become more reliant on invested solutions to support retirement income. With defined contribution pension assets expected to be nearing £1 trillion by 2030*** , the demand for support in turning those savings to income can only grow. So how do we generate what clients will need to sustain income in retirement?
20 mins Reading time
Published on 24 June 2025
Key takeaways
- Regulatory focus, increased inflation risk, and a more volatile market outlook are good reasons for advisers to reconsider how they invest for clients seeking retirement income.
- A natural income approach, where the client’s income comes from the income paid by the underlying assets, is well suited to providing a sustainable income but has several challenges.
- The Managed Income approach aims to address these challenges by delivering income and capital growth in a way that meets clients needs and simplifies planning and administration for advisers.
- Managed Income can also be useful for clients in the run up to retirement providing income growth and transparency of the income available further simplifying retirement planning.
* William Sharpe
** “Retirement Advice in the UK: Time for change?” BNY Investments and NextWealth, November 2025
*** “Pensions and Growth: A Paper by the PLSA on Supporting Pension Investment in UK Growth”, Pensions and Lifetime Savings Association, June 2023
The value of investments can fall. Investors may not get back the amount invested. Income from investments may vary and is not guaranteed.
2451300 Exp : 07 May 2026
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