Press releases

Walk this way: Study shows over 60% of pre-retirees support the FCA’s Investment Pathways initiative

27 Jan 2021

Full press release

  • The strongest interest comes from savers with £30,000-£100,000 pots, the majority of the non-advised drawdown market.
  • 90% of savers are able to align an option to their needs.
  • Income drawdown is the most popular option for both prospective users (46%) and those already withdrawing (43%).
  • Inertia remains the biggest barrier to adoption, 33% of prospective drawdown users will not move from their default accumulation fund unless prompted.
  • 81% think that five-year review periods are too infrequent.

Legal & General Investment Management (LGIM) has joined forces with NMG Consulting (NMG) to investigate how well-equipped today’s UK savers are for non-advised drawdown five years on from Freedom and Choice. A survey of nearly 1,200 non-advised existing and prospective drawdown users’ finds that over 60% of prospective retirees support the introduction of Investment Pathways.

The Investment Pathways initiative, which is intended to clarify the choices savers have and encourage them to take an active route through their retirement years, is supported by almost 70% of retirees-to-be under 55 and 60% of prospective drawdown Baby Boomers over 65.

The strongest interest in Investment Pathways comes from pre-drawdown savers with pot values between £30,000 and £100,000, which represents the majority of the non-advised drawdown market. Savers praise the clarity and simplicity of Investment Pathways, with nine in ten consumers being able to align at least one of the options to their needs, while 60% felt confident enough to make an independent decision following the guidance they received. Only 12% of prospective users felt the need for more formal financial advice.

Meanwhile, more than half of existing drawdown users think Investment Pathways are too basic, due to their lack of fund choice: a third of respondents want to choose from a small shortlist of funds, while a fifth would prefer a wider fund choice.

When it comes to available options, income drawdown is the most popular pathway for both prospective (46%) and retired drawdown customers (43%).

Similarly, the vast majority view withdrawing all of their money as a reckless, inappropriate option and any decision would need to be accompanied by detailed risk information.

While choosing a single pathway was the most popular strategy for prospective drawdown users (38%), over a third (36%) said they would split their pot between pathways and many said they would migrate between pathways over time, with 60% of respondents saying they would be more likely to do this following an annual review.

That said, the existence of the Investment Pathways concept alone doesn’t solve the problematic lack of retirement planning, according to the study. Just 44% of prospective drawdown customers say they will actually use the Investment Pathways. Inertia remains the biggest barrier to adoption, with 33% of respondents saying they would not move from their default accumulation funds unless prompted.

Emma Douglas, Head of Defined Contribution at LGIM: "The positive reception to Investment Pathways is a promising first step in overcoming inertia at retirement and achieving greater engagement with non-advised members. The Investment Pathways go a long way in alleviating anxieties, in particular for non-advised savers who are yet to draw down.

Digital tools can help bring the Pathways concept to life, extending beyond the four simple options to bringing about a greater understanding of the risk and reward of each solution. Our research found that members welcome more regular guidance when making decisions on their retirement, with 81% feeling the the current 5 year review is too infrequent. It is therefore important we keep in close contact with members during this stage of their retirement journey as they make decisions of how to spend their money.

Done well, Investment Pathways should complement other industry initiatives such as the Pensions Dashboard and also pension consolidation, to give members a single view of their retirement investments and clear information about their options. In this way, we can turn the confidence boost that Investment Pathways deliver into meaningful action which delivers better retirement outcomes for savers."

Jane Craig, Partner at NMG Consulting: "It’s great to see a much needed default solution for retirement income come to market. But it’s clear that the less engaged proportion of pension savers are going to need a really strong nudge to take notice and act – the greatest barrier to take-up is likely to be inertia."
Dermot Courtier, Independent Chair of the L&G: "We are encouraged by the positive appetite from pre-retirees for more education and engagement as they commence and continue down their journey into retirement. The decisions made by individuals as they near retirement could have a significant impact on their finances, so it is incredibly important to ensure members are given the right options, especially to support investment decisions while in drawdown. It is therefore reassuring that the options available are meeting the majority of members’ expectations, further supporting our commitment to delivering the best outcomes for our members."

Key Risk Warning

The value of an investment and any income taken from it is not guaranteed and can go down as well as up; you may not get back the amount you originally invested.

Further information

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Lodovico Sanseverino

JPES Partners

T: 0207 5207 631

Email Lodovico Sanseverino

Notes to editors

Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which a third is international. We also provide powerful asset origination capabilities. Together, these underpin our leading retirement and protection solutions: we are a leading international player in pension risk transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.

*at 31 Dec 2022

Legal & General Investment Management

Legal & General Investment Management is one of Europe’s largest asset managers and a major global investor, with total assets under management of £1.2 trillion1 ($1.4tn, €1.4tn, CHF 1.4tn). We work with a wide range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.

For more than 50 years, we have built our business through understanding what matters most to our clients and transforming this insight into valuable, accessible investment products and solutions. We provide investment expertise across the full spectrum of asset classes including fixed income, equities, commercial property, and cash. Our capabilities range from index-tracking and active strategies to liquidity management and liability-based risk management solutions.

*at 31 Dec 2022

1LGIM internal data as at 31 December 2022. These figures include assets managed by LGIMA, an SEC Registered Investment Advisor. Data includes derivative positions.


Past performance is not a guide to the future. The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested. For illustrative purposes only. Reference to a particular security is on a historical basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security. Views expressed are of LGIM as at 3 January 2023.


In the European Economic Area, it is issued by LGIM Managers (Europe) Limited, authorised by the Central Bank of Ireland as a UCITS management company (pursuant to European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (S.I. No. 352 of 2011), as amended) and as an alternative investment fund manager with "top up" permissions which enable the firm to carry out certain additional MiFID investment services (pursuant to the European Union (Alternative Investment Fund Managers) Regulations 2013 (S.I. No. 257 of 2013), as amended). Registered in Ireland with the Companies Registration Office (No. 609677).  Registered Office: 70 Sir John Rogerson's Quay, Dublin, 2, Ireland. Regulated by the Central Bank of Ireland (No. C173733).

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