AI conniptions/Guided retirement set to require a sustainable income default for workplace scheme retirees

The AI and microchip sector reacted badly to the Democrats’ resounding wins in the US mid-terms. Among other things, they fear regulation and more specifically a Democrat governor in Texas bringing new data centre construction to a halt pending more conditions being met around generation and the environment. This was the take of US financial news site CNBC.

AI has been driving markets so markets in general reacted badly.

Managers are looking to diversify as the US tech sell-off spirals after midterms amid AI capex fears as Investment Week reports. Reuters, if anything, was even more bleak with this headline – Global markets were already fragile. Big AI bets could break them.

In the UK, we already knew about plans for Guided Retirement. It was in the Pension Schemes Act. But now we have a Department for Work and Pensions consultation which seems to be doubling as a consultation from both regulators. Essentially scheme members asking their provider for an income will be defaulted into a sustainable pathway if they have more than £10,000 in assets and crucially they don’t choose anything else.

It doesn’t read as a full early annuitisation nor full drawdown but some sort of in-between probably flex and fix i.e. managed drawdown (in terms of withdrawals and later annuitisatiion).

We did a lot on Octo Members last week. Here is an explanation of why it was the Big Story including for advisers with this long intro –  Guided retirement could shake up the pensions world. Advisers may have to define their retirement advice against it. We listed more than a dozen points from the paper here.

The Times is warning the government to ‘Stop the Pensions Power Grab“, a campaign no less, amid talk of the Nanny State. (Our reading is that any near retiree remains able to do whatever they want. And – for once – we tend to agree with the pensions minister Torsten Bell who has taken to social media to hit out at the story/campaign.

Law firm Pinsent Masons suggests that plans should lead to better outcomes for DC savers. Pensions Age reports that Guided retirement plans spark concerns over trustee responsibilities and member choice.

So to what we might call core IFA news. (The retirement will become huge in several ways a bit later) Citywire New Model Adviser reports that Progeny is offering advisers 50% bonuses on new fees; 25% on recurring.

NMA also notes departures at Titan Wealth which has seen 70 regulated individuals depart from its acquired IWP business since the start of 2025 amid concerns among some about remuneration, and alleged favouring of in-house solutions.

And of course, the base rate has risen to 4% and the Bank of England Monetary Policy Committee is sounding decidedly more hawkish. Mortgage Strategy reports rising trackers, and slightly falling fixed rates, but they had gone up already in anticipation.