23 September 2026
To help provide some independent thinking ahead of a major consultation on guided retirement, the IFoA has commissioned a report by the Behavioural Insights Team (BIT). The report looks at how customers might behave against the proposed designs for defaults to help the pensions sector, consumers and other stakeholders consider how this might best serve the public interest.
Read the report | Defined contribution guided retirement: A behavioural perspective
This report, drawing on the BIT’s evidence on pension-decision making and the IFoA CDC and Collective Benefit Schemes Working Party’s expertise in retirement solution design, examines how those defaults should be designed to meet the aims of guided retirement.
The BIT assessed the four broad designs of retirement options against behavioural evidence on pension decision-making and found that any design element requiring active member engagement in later life is at serious risk of not being acted upon. This means that pensioners could be left at risk of over-drawing or under-drawing their pension, from erosion of savings due to inflation and from inappropriate investment decisions. The Second Pensions Commission recently found that three-quarters of defined contribution savers over 40 currently have no plan for accessing their fund, meaning millions of pensioners could end up with reduced savings without action.
The report concludes that any design requiring active decision-making in later life is at serious risk of failure as inertia and cognitive decline take hold.
Note of thanks: We would like to mark our appreciation to the BIT team for providing expert insights independently for this report, which we commissioned to ensure the concept of guided retirement addresses the public interest. We would also like to thank the IFoA CDC and Collective Benefit Schemes Working Party for their valuable comments to guide the BIT in developing this paper (including David Still, Alan Newton, James Franklin-Adams, Helen Draper and Simon Eagle) and IFoA Pensions Board chair Glyn Bradley for his guidance.