Fidelity International is planning to shake up the retirement savings market in the UK with the launch of a new suite of investment products designed to give savers greater flexibility and control over their lifetime savings. Fidelity says that the need for this week’s launch of the suite of six Fidelity Retirement Funds has arisen because people are under-prepared for retirement and there is an overwhelming need for more self-provision with the demise of the company pension scheme. People are living longer in retirement. A 30 year old now has a better chance of living to age 100 than dying before 65, Michael Jones, head of UK financial institutions at Fidelity, told WealthBriefing. But investors’ appetite for traditional pensions involving the eventual purchase of an annuity is on the wane, according to Fidelity. “We believe that people are very keen to preserve capital in retirement and pass wealth onto the next generation,” said Mr Jones. But people are missing out because the current attitude of retirees is to totally de-risk and remove all allocation to equities. The new suite of funds seeks to reverse this trend. The new suite allow Fidelity to allocate assets initially a blend of shares, bonds, cash, commodities and property securities which will be managed under dynamic asset allocation. Initially 80 per cent of the fund will be allocated to equities, but there will be what the company calls a glide path down over time in favour of bonds so that at retirement the fund will be 70 per cent in bonds. The funds will take an absolute return approach, and will enable investors to build up an investment portfolio during their working lives and then draw an income that should rise over time from these assets at a date of their choice. Retirees can have access to their capital at any time and, unlike traditional pensions in annuities, can pass on any remaining assets to their families. The innovation that lies behind the design of the Fidelity Retirement Fund range is the concept that savers should continue to keep some of their money invested in the stock market beyond the point of retirement. Fidelity recommends an annual draw-down rate of 4 per cent in retirement, which is taken monthly, and can reasonably expect to insulate their capital against inflation over the long-term – and so have the prospect of a rising income. Although Fidelity claim a degree of certainty, this is not a guaranteed product. The funds do offer flexibility in that an investor can elect to take out more or less than the recommended four per cent. “What we’re doing here is helping savers start investing for their retirement early and to stay properly invested for longer,” said Mr Jones. “With this product we are saying that we shouldn’t wave goodbye to investors at retirement, and with this we are signalling our commitment to compete against the traditional pension providers such as the insurance companies.”