The Pensions Regulator (TPR) has called on pension scheme trustees to reconsider their decumulation strategies now to deliver better retirement outcomes for savers, warning that adequacy is the "biggest challenge of our time". 

In a blog post, TPR interim director of pensions reform, Patrick Coyne, argued that whilst "we have done the hard work of getting people saving...now we must make sure it's worth it", highlighting recent research from the government revealing the scale of the challenge facing defined contribution (DC) savers.

The recent figures from the Department for Work and Pensions (DWP), which surveyed more than 4,000 people aged between 40 and 75, showed that less than a quarter (22 per cent) of people who had not yet accessed their DC pension said they had a clear plan for how they would access it.

In addition to this, 21 per cent did not know they had to make a choice, while 56 per cent knew there was a choice but did not have a clear plan.

What's more, research from the Pensions Policy Institute, sponsored by TPR, found that, of those fully withdrawing their DC pension savings, over 70 per cent did so without professional advice or tailored guidance.

Coyne argued that the findings should be a "wake-up call" for trustees, emphasising that generic solutions are unlikely to be enough to address these concerns.

"If we don’t act, we risk a generation of savers reaching retirement with too little and too few options," Coyne warned. 

"That is why trustees must rethink their role, not just as stewards of assets, but as enablers of good retirement outcomes. Generic solutions will not cut it. We need simple but tailored support, smarter decumulation strategies, and clearer guidance."

Coyne also pointed out that whilst there are services such as Pension Wise and Money Helper available, awareness remains low, with the DWP's research revealing that less than a third (30 per cent) have heard of Pension Wise, whilst just 9 per cent know about Money Helper. 

Coyne therefore argued that trustees could do more to signpost these services early and often, not just at the point of retirement, suggesting that given the role inertia plays in the UK's pension participation, "we need to rethink how we build awareness and support". 

And although Coyne agreed that pensions dashboards will be a "vital step" toward a more engaged saver base, he warned that it will also highlight the adequacy gap that many are facing.

"Greater awareness is the first step towards good retirement decision-making. But awareness alone won’t be enough; we need new solutions that help support savers into the right retirement products for them," he said. 

"I want trustees to see this as an opportunity to lead. By aligning messaging, reviewing decumulation options, and training customer support teams, they can be ready to meet the moment and help savers with the most difficult problem in finance.

Given this, Coyne urged trustees to engage with members to understand their goals and use this insight to shape strategies, also encouraging trustees to prepare for change, and get ready for dashboards, guided retirement, and a more engaged membership.

"Together we have brought millions into pension savings. Now we must ensure saving leads to security, dignity, and choice in retirement," he said.

"The adequacy challenge demands action."

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