It is only a few weeks since we woke up to the news of a hung parliament. So what does the political backdrop mean for us? I am not in the business of making predictions but it is important to ask both ourselves and our clients whether the Brexit glass looks half full or half empty, as this will influence our approach to retirement advice.
There is the possibility of a slowdown in the UK economy caused by the uncertainties over negotiations, which may lead to stockmarket volatility. Meanwhile, increased inflation will mean rising prices for goods and services and a strain on household incomes.
As far as pension policy is concerned, the Government has more important things to worry about, so do not expect too much tinkering. The elephant in the room is pension tax relief and it does remain possible this will be reviewed in the future.
For annuities, the outlook is unchanged, with short-term interest rates and yields set to remain low. Increased inflation will eventually lead to an increase in rates and yields but I am advising people not to hold their breath.
For drawdown, the fear of market volatility should prompt advisers to play it safe. If there was ever a time to practice what we preach about managing sequence of returns risk, it is now.
The best result for annuities and drawdown will be a continuation of the pre-election expectation of slowly rising yields and a strong and stable stockmarket. The worst result will be a double whammy of falling annuity rates and fund values.
There are some helpful solutions advisers can use to start reducing risks in post-retirement investment strategies. Look again at things like high-yielding income funds, unit-linked guarantees and well diversified multi-asset funds.
As one expert said to me: the best way to manage investment risk in drawdown is to have a diversified investment strategy. After all, the glass might be half empty in the UK but it could be half full in the rest of the world.
Billy Burrows is director at Retirement IQ and adviser at Better Retirement