If the last few years have taught us anything, it’s that uncertainty is constant – and we never truly know what’s waiting around the corner. This persistent risk of the unknown can be a threat to any good client outcome, especially for those approaching or in the early years of retirement. A key focus for Standard Life is finding new ways to help advisers confidently guide their clients through this important life stage – which we refer to as the ‘Retirement Risk Zone’. 

How does your Smoothed Return Pension Fund align with this ambition?

The fund is for those clients who are less willing or able to deal with the effects of market volatility or for those looking to incorporate the potential for a more predictable return within their portfolio as they get closer to retirement. It also offers the potential for a more stable return for those who choose to draw down their pension, giving them comfort that short-term market movements are less likely to affect the consistency of their chosen retirement income.  

What’s the thinking behind your design of the fund?

Twenty years ago, I helped to design what’s become the most successful smoothed fund on the market – but times have moved on and there’s a need to modernise the approach. People are savvier these days. They’re more used to investing across a range of investments on open architecture platforms and want to stay close to the value of what they have.

For the Standard Life Smoothed Return Pension Fund, we’ve focused on giving advisers more flexibility in how it can be used. For example, using a combination of cash reserves, smoothed funds and a growth portfolio on an unfettered investment and retirement services platform will ultimately give advisers and their clients more robust withdrawal options. And this can offer better protection from sudden market downturns. 

In other words, clients can draw from their cash holdings and smoothed funds during market downturns, reducing the need to sell growth-oriented investments. Thereby helping mitigate sequence of returns risk and preserve the growth assets and portfolio growth potential for when the market recovers.

You’ve deliberately built this as a unit-linked product, rather than with-profits. Why? 

By design, a with-profits fund can have several masters. And this can mean that clients are investing into a fund that has multiple goals. Our approach brings transparency to the fund and the mechanics that sit behind the smoothing engine.   

Tell us about the Estimated Growth Rate (EGR) you’re using as your smoothing mechanism.

We’ve profiled the effects of recent market volatility and baked this into our EGR projections. We believe this not only makes it realistic for advisers to plan with, but it should also remove the need for us to make unnecessary adjustments. We do, however, review the rate at least once every quarter to make sure we’re delivering the best return possible relative to the fund’s defined risk corridor. 

Having a robust EGR, with strong ongoing governance, gives advisers and their clients a reference point for how our fund should perform. And, in turbulent times, this should help give clients confidence to stay on their investment journey. 

What’s next for Standard Life and your retirement income solutions?

We know the world is changing. For many people 40 years of working will need to pay for 30 years of retirement. Moving into retirement against a backdrop of market and geopolitical uncertainty, the approach to retirement income of choosing an uninsured drawdown journey is becoming outdated. 

As announced in Rachel Reeves’ 2024 Autumn Budget, most unused pension funds and death benefits are set to be included within the value of a person’s estate, for Inheritance Tax purposes, from 6 April 2027. This upcoming change is likely to prompt renewed interest in the ‘annuity versus drawdown’ debate, albeit with different optics. 

We believe there’s a growing need to move towards approaches that integrate investment strategies with solutions designed to manage various risks associated with retirement planning in a single framework, to help manage a sustainable income throughout retirement years. Combining these strategies and solutions can help individuals and their advisers navigate the complexities of retirement planning with greater confidence. 

Our focus is to continue working with advisers and developing an innovative offering to help achieve that.  

This article was written by Standard Life and published initially by Money Marketing. Money invested is at risk. This information is for qualifies financial advisers and must not be relied on by anyone else.

The Standard Life Smoothed Return Pension Fund is exclusively available within a pension account on the Fidelity Adviser Solutions platform. For more information please visit your support page. 

Phoenix Life Limited, trading as Standard Life, is registered in England and Wales (1016269) at 1 Wythall Green Way, Wythall, Birmingham, B47 6WG. Phoenix Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Phoenix Life Limited uses the Standard Life brand, name, and logo, under licence from Phoenix Group Management Services Limited. © 2025 Phoenix Group Management Services Limited. All rights reserved.