The US investment firm has launched funds it says play to the changed landscape of retirement savings in the UK.

Vanguard, the US investment giant, has rolled out a set of retirement funds designed for UK citizens adjusting to new financial freedoms.

The company has unveiled a suite of Target Retirement funds that hold the firm’s index and exchange traded funds. Savers can chose one of Vanguard’s nine TRFs based on an expected retirement date.

The funds automatically adapt the asset mix for the different stages of the investor’s journey to and through retirement. Vanguard said the TRFs can be included in structures such as Self-Invested Personal Pensions, Individual Savings Accounts and the recently introduced Lifetime ISA from 2017. In the US, TRFs have become increasingly popular among individual investors and retirement plan participants, the firm said.

“We’ve created Vanguard's Target Retirement Fund range in the knowledge that not everyone will know whether they will take lump sums, a regular income or buy an annuity until they retire,” said Steve Charlton, retirement expert at Vanguard.

The issue of pensions and retirement planning has become increasingly important for the wealth management industry in the UK because of changes to pension savings rules and tax changes enacted by the current and previous governments. Last year, UK finance minister George Osborne freed up holders of defined benefit pensions from certain restrictions on how they can invest their money at the age of 55, and also changed inheritance tax treatment of retirement savings.

“The UK retirement landscape is changing rapidly. Following pension freedom reforms in 2015, investors have more flexibility and choice but they also face even more decisions on how to save for retirement and how to spend or draw an income in retirement,” said Charlton. 

A year after the pension freedom reforms in 2015 and changes to the annual and lifetime allowances, investors now have the option of saving for retirement via a workplace pension, a SIPP, an ISA or the new Lifetime ISA as announced by Osborne in his annual budget last month.

Investors can buy the new TRFs through platforms including Ascentric, Raymond James, Novia, Zurich, FNZ, Alliance Trust Savings, Hargreaves Lansdown, Fidelity Personal Investing and Aviva Investment Account.

Vanguard managed $358 billion in US-based target-date assets as at the end of December 2015.