The study will assess the range of options available to consumers and the advice needed to help them make the most of their assets, both at and throughout retirement.
The project is being overseen by an editorial board that includes MP John Gummer, Lord Lipsey and director of the pensions institute, Cass Business School Professor David Blake.
Aifa and Pru say around 690,000 people will reach retirement age this year, with the figure projected to grow to 860,000 by 2030.
The study will deliver a final report to contribute to the thinking of politicians, public policy professionals, regulators, consumer groups and the wider industry. Aifa will also produce a set of good practice guides for financial advisers to help them advise their clients on the options at and in retirement.
Research to support the study will be conducted by financial services consultants from Watson Wyatt. The conclusions of the study will be published in the summer.
Aifa director general Chris Cummings says: “More than 14 million people in the UK will reach state pension age by 2030. This presents a real challenge to Government and the financial services industry. How can people best manage their income in retirement to maximise their quality of life and minimise the burden on the State?
“To date, the financial services industry has largely focused on the accumulation of assets by consumers. We must now focus on how this wealth is used during retirement.”
Prudential managing director of retail life and pensions Barry O’Dwyer says: “With life expectancy at age 65 now almost 20 years for both men and women, the need to make best use of retirement assets is more important than ever and we are delighted to be working with AIFA on this important study.”