Jonathan Watts-Lay, Director, WEALTH at work, discusses the use of defaults with Pensions Expert, commenting that they are; “a lazy substitute for engagement.”
Watts-Lay adds; “Defaulting towards annuities could see a member miss out on important returns while locked into low-yielding bonds. Meanwhile, defaulting towards drawdown could leave them exposed to stock market crashes when they come to buy a pension.”
“For accumulation the risk of [default options] is kind of low,” he comments. “When you get to decumulation, the risk is massive.”
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