Chancery Lane Research (CLR) has released its fifth annual white paper, Retire Well 2025, offering what CEO Doug Brodie calls ’empirical evidence, not opinion’ on how advisers can deliver reliable, inflation-resilient drawdown income for their clients.
This year’s paper is split into three distinct parts:
- a new dedicated section with practical explanations for advisers and retail investors,
- a technical section analysing and comparing deterministic and stochastic projections, plus sections on key elements of drawdown; passive, active and annuities compared side by side; results of using the 4% Rule in the UK; the volatility trap; defining risk for retirees and the hidden costs of passive investing,
- a database of the historical results from the last 25 years measuring different methods of withdrawal with different methods of investing.
The Projected Income Pension
A key outcome of this year’s analysis is the Projected Income Pension (PIP) – a data-driven income framework developed and tested by Chancery Lane since 2007. Each PIP portfolio converts a retiree’s accumulated pot into predictable monthly income, using live historical data rather than modelled projections.
In essence, it is a money purchase pension, able to reasonably project annual income over the coming 5/10 years, based on historical data of actual cash receipts from natural income investments, such as investment trusts and fixed income payments. Importantly, it does not rely on capital or stock market growth to fund pension income.
Chancery Lane maintains this is potentially the closest thing yet to an uninsured defined benefit pension, in terms of predictability, and more attractive in terms of residual capital.
It says, that across 17 years of live client testing, PIP portfolios have never produced a fall in annual income- not even in 2008, 2011, 2020 or 2022.
Doug Brodie says: “We’ve shown, empirically, that it is possible to engineer predictability. Projected Income Pensions are not an idea; they are based on a combination of 17 years of live client testing and rigorous research data. Unlike many of the solutions offered to advisers, this is born of practice and not just theory – transforming a retirement pot into a dependable pay cheque. Our data proves that with discipline, resilience and reliability can be delivered without sacrificing growth.”
Real data – real results
Research within the paper examines 37 years of market and dividend history (1987- 2024), comparing outcomes from annuity income, 60/40 portfolios, the MSCI World and FTSE 100 indices, and natural-income portfolios built from investment trusts.
It finds that investment-trust income streams rose faster than inflation and proved stable across every 25-year window- including over market downturns and crashes. Both trackers and 60/40 models failed to maintain income once inflation indexing was applied. More, the average investment trust-dividend growth was 6.16% p.a. over these periods versus RPI 2.96% p.a.
Brodie, added:
“We are agnostic, we are not fund managers but the facts speak for themselves: Advisers need to start to question the conventional allocation models being promoted within the industry. The traditional 60/40 portfolio may not suit modern retirement needs. Advisers should beware, as most investment guidelines offered to them hail from institutional investment firms, whose research is based on institutional theory for institutional clients, with multiple simultaneous cashflows and multiple beneficiaries and an open timescale of generally over 50 years. Our number one message is ‘prioritise reliable income’. The second message: ‘sequence risk is coming – don’t trust fund managers to solve it, their job is running funds not running clients’.”
Nick Britton, Research Director of the Association of Investment Companies (AIC), said:
“Investment trusts have structural advantages that help them maintain or raise dividends even when times are tough. They are a tried and tested retirement income solution with a great track record. This research is a valuable contribution to the debate about how to invest for predictable retirement income.”
Why advisers should re-examine Monte Carlo modelling
Section 2 of Retire Well 2025 re-evaluates Monte Carlo analysis — a cornerstone of many planning systems. Chancery Lane compared four forecasting techniques across historic market periods and found that data-driven historical and regime-based simulations deliver the most accurate and transparent retirement projections.
Ongoing education for advisers
This year’s Retire Well builds on Chancery Lane’s ongoing Predictable Income for Advisers video campaign, which provides practical guard-rails for annual drawdown reviews, techniques to explain sequence-risk to clients, and evidence that deterministic income planning can match retirees’ real spending needs.
Most recently, this involved a four-part video series produced with Asset TV and leading managers, to highlight the need for greater education around using investment trusts for income.
Copies of the fuller report are available on request from hello@chancerylane.net
