September marked the completion of our annual pensions process review. This extensive review focused on pensions in terms of product developments, market trends, and regulatory changes.
Regulatory developments
As noted in our June product update, the Chancellor’s Budget in November 2024 confirmed that from 6 April 2027 defined contribution pensions will no longer fall outside of a person’s estate for IHT purposes. The industry is still digesting this news, and no revisions to the plan have been announced ahead of the 2025 Budget.
Pension product changes
Unlike the regulatory space, there have been several changes to retirement products. Eight products were added and now qualify through our filter criteria, and two new products have entered the market.
For full details of all product additions and removals, you can receive a product research change log via email. To subscribe, update your email preferences under my settings to include research emails.
Adviser feedback
We’ve seen an increase in enquiries around business relief schemes, with firms showing a preference for unlisted providers over AIM-listed schemes. Provider due diligence is available on DD|hub to support preparation for the new allowances coming into effect. Whole of life and gift inter vivos enquiries have also risen, reflecting demand for protection solutions to mitigate inheritance tax alongside gifting rules.
The AKG rating effect
Financial strength is a key part of provider due diligence, and ratings reports are a valuable tool in meeting Consumer Duty obligations. The AKG rating is one of the filters we apply to our pension research, given the long-term nature of pension investments. A strong rating can support recommendations and help avoid foreseeable harms.
In July 2025, AEGON achieved a B+ (Very Strong) rating. As a result, the AEGON One Retirement Pension, Platform, and AEGON Retirement Choices SIPP have been re-added to our personal pension research. Similarly, the AEGON Master Trust and TargetPlan Group Personal Pension and Workplace Schemes have been re-added to the Workplace Pension Comparison.
Personal pension research
We’ve introduced a new data point in our personal pension research – drawdown adviser needed: existing benefit. Where clients are serviced on a transactional basis, the cost of advice can limit ongoing involvement. This feature identifies products that allow clients to request further payments from funds already in drawdown without adviser input, helping them manage their pots independently once a plan is arranged.
Products providing income guarantees
Pension freedoms have provided clients with greater flexibility in managing income needs in retirement. However, Consumer Duty and the risks of longevity have driven providers to develop more innovative product designs.
Guaranteed income products are gaining popularity. In addition to the Standard Life Guaranteed Lifetime Income Plan launched in June, AVIVA and Prudential both launched guaranteed income plans in August 2025, with others expected soon. LV has also refreshed its Fixed Term Annuity trustee version.
With strong annuity rates and new product launches, income guarantee solutions may become an increasingly important adviser product area to support retirement planning.
Protection and investments data update
Although the review focused on retirement products, we also updated our investment and protection research to ensure information remains current.
Protection product changes:
Continuing the theme of IHT planning, we’re seeing challenges in the whole of life market for older clients. Once clients reach age 78, availability of gift inter vivos and whole-of-life options diminishes, with no products available beyond age 89. We’ve also noted that AVIVA has removed the conversion option from its term assurance plans. Current availability is reflected in our Life and CIC research.
Other areas worth highlighting in the Life and CIC research include free cover and pre-underwriting cover, where product differentiation remains strong and could support product selection.
Investment changes:
The investment product research has also been refreshed. The key change of note is HSBC’s announcement that it will sell its life and investment book to Chesnara, with the deal expected to complete early next year.
Next review
The next product review by our research team is scheduled for January and will provide a detailed process and market review of protection.
