The UK drawdown market is expected to triple over the next decade from £200bn to £600bn, analysis from Guiide has found.

The company said that defined contribution (DC) pension savers nearing retirement have been left with two options, either to pay for regulated financial advice or manage everything themselves.

However, it acknowledged that when facing retirement most people don’t take financial advice, with the Financial Conduct Authority research finding that ‘only’ 32 per cent do.

The research also pointed out that more than a quarter (27 per cent) of people buying an annuity pay for advice, while over half (52 per cent) using drawdown do the same.

The company also acknowledged that pension freedoms were “immensely popular” when first launched, and argued that savers do not want to go back to a world where they are forced to buy an annuity.

However, Guiide said savers face some tough financial planning decisions, including how much to take each year without running out, how long the saver will live and therefore need the money for, where to invest, how to reduce tax, and which provider to use.

Furthermore, Guiide pointed out that circumstances change in terms of people's health, spending needs, etc, meaning retirement plans need to be monitored and adjusted on an ongoing basis for many years.

It also said the available data on the retirement income market suggested many people may be making short-term decisions when withdrawing money from their pots.

Guiide said that this could be “storing up problems” for the decades to come as retirees find themselves outliving their savings, while others are “too worried” to see their pots fall in value and therefore live a much more frugal life than needed.

Given this, Guiide, alongside pension provider and investment manager partners, will launch the UK’s first guided retirement income solution for DC savers at and through retirement.

The solution will be tailored and personalised to each saver’s retirement plan without the need to pay for regulated financial advice.

Guiide’s existing retirement planner enables savers to create a plan for withdrawing flexible drawdown income from pension and savings pots, incorporating guaranteed annuity income and tax-free cash options, to meet their total income needs without running out of money.

The new solution was developed and integrated with these plans, allowing savers to not only build, test, and track their plans but also to execute and monitor them over time.

Therefore, savers can share their calculated retirement payments from the Guiide plan with a low-cost pension provider, who will pay them like a wage in retirement.

In addition to this, the calculated payments and a length of income matching are given to an investment manager, who allocates the pension pot across three tailored funds based on the saver’s needs.

When this launches, savers can use this guided option on a single plan basis or combine it with their partner’s income to create a household plan.

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