St. James's Place, the UK-based wealth management group, is launching its new InRetirement fund range, developed specifically for those looking to support a regular income through their retirement.
It has identified the next decade as the decade of retirement and one of the key challenges is the 'Baby Boomer' generation retiring. Today in the UK, there are around 12 million people over the age of 65, roughly 20% of the population, and many are living longer. But it poses a new challenge - providing a sustainable income in retirement.
As a response, it is launching three new funds on 21 September, named Prudence InRetirement, Balance InRetirement and Growth InRetirement, to reflect their distinctive investment objectives. They have been designed to cater for a range of client goals in decumulation, from prioritising a steady income to maximising the value of an inheritance.
In the past 100 years we’ve seen a rapid increase in life expectancy. At the turn of the last century you could expect to live until 38, today the figure is into the 80s. Children born today have a 50 per cent chance of reaching their 100th birthday."
The new funds have been launched in response to the growing needs of clients, where retirement income considerations will be more important as the age of investors increases. In addition, the advent of pensions freedoms has created a greater need for advice towards retirement goals, as options grow.
- The Prudence InRetirement fund has the least investment risk, suitable for clients who have only some capacity for loss and flexibility within their individual circumstances.
- The Growth InRetirement fund has the most investment risk, suitable for clients who have a greater capacity for loss and flexibility within their individual circumstances.
- The Balance InRetirement fund is situated in the middle of the two other fund profiles.
Rob Gardner, Director, Investment Management, St. James's Place, said: "The next decade is going to be the decade of retirement. In the past 100 years we've seen a rapid increase in life expectancy. At the turn of the last century you could expect to live until 38, today the figure is into the 80s. Children born today have a 50 per cent chance of reaching their 100th birthday."
"We have an aging population, too. The proportion of the UK population aged 65 or over versus those 18 and under is the highest it's ever been. It's amazing to consider that every day in the UK some 2,000 people will celebrate their 65th birthday. They have spent the past forty years in the workplace, earning a salary and - hopefully - saving towards their retirement."
"The question is: how do they turn their retirement savings into an income stream that lasts as long as they live? But not only that, how does that income keep pace with inflation? A comfortable income today may not be enough in ten, twenty or thirty years' time.
Gardner added: "The challenge, the decumulation challenge as we call it in the industry, is simply solving the problem of turning your retirement savings into a lifetime income stream."
State Street Global Advisors will manage the funds, with responsibilities including ongoing rebalancing of the underlying funds, cash flow management and currency hedging.
Dan Farley, CIO, Investment Solutions Group at State Street, added: "Increased longevity and the rise of multi-stage lives have put a focus on the need for well-designed post-retirement solutions. We have worked with St. James's Place to develop the InRetirement range, a unique proposition designed to balance investors' needs between growth, capital protection and reliable income, while offering them simplicity and flexibility."
"This integrated solution combines St. James's Place asset allocation and unique fund selection process with State Street Global Advisors' extensive experience in managing multi-asset retirement portfolios. We believe that this approach will help investors cut through the complexity of investing in retirement."