Making a rational decision

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Mike Morrison looks at how people make retirement income decisions and concludes they are not always rational.

I have been doing a series of talks for the PFS on retirement planning. In the brief there was the need to consider retirement income options - so the standard ‘annuity versus income drawdown' debate with some consideration of the alternatives and variations. I also tried to look at the decision-making process facing individuals. It is very easy for us, as product providers and advisers, to work out theories about how we think consumers will react but, in reality, much research has been done to show that consumers tend not to react in an entirely rational way. What is retirement plann...

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