Rethinking retirement: How Invesco Bond Income Plus Limited could fit the new retirement landscape

This section is a paid promotion created in partnership with Invesco. The views and information presented reflect the sponsor’s messaging and may not represent the independent opinions of Boring Money. While we aim to ensure accuracy and relevance, this content should not be considered impartial advice.

Discover how Invesco Bond Income Plus can support flexible retirement planning in the UK’s evolving pension landscape. Learn how retirees are adapting post-pension freedoms and managing income sustainability.

Over the past few decades, the idea of retirement has changed dramatically. In the past, many people relied on Defined Benefit (DB) pensions, which guaranteed a set income for life. But today, most people have Defined Contribution (DC) pensions, where the amount you get in retirement depends on how much you’ve saved and how your investments perform.

Things changed even more in 2015, when the UK government introduced pension freedoms. These new rules gave people full access to their pension pots from age 55, along with a range of flexible options for how to take their money. While this gave retirees more control, it also introduced new challenges - like the risk of running out of money later in life.

To better understand the implications of these changes and how they can be addressed, Invesco teamed up with NMG Consulting to carry out a major study of the UK retirement income market. We spoke to retirees, financial advisers, and industry experts to get a full picture of what’s working - and what’s not.

What we found

One of the key takeaways from the study was the need to rethink the solutions for how we provide income in retirement, especially for people with DC pensions. Here are some highlights:

• 75% of financial advisers say we need more innovation in retirement income products.

• 61% of financial advisors believe that creating solutions that offer sustainable income is a top priority. Whilst 56% believe that protection against outliving one’s savings is an important matter of concern.

• But there are hurdles: product complexity (56% and regulatory red tape (49%) are making it harder for people to access the right solutions.

• 56% of advisors cite product complexity as a key barrier to adoption and 49% cite regulatory constraints.

BIPS: A solution worth considering

The Invesco Bond Income Plus Limited (BIPS), is an actively managed fixed income investment trust, that could provide income in retirement. Its goal is simple: to deliver income through quarterly dividends, to give retirees an income stream, whilst also aiming to grow the portfolio over the long term, which can be drawn down when you’re ready, unlike other solutions such as annuities. The trust is a retirement strategy, but capital remains at risk. It’s important to note that the value of investments and any income will fluctuate, and investors may not get back the full amount invested.

The trust targets an annual income of 12.25 pence per share, which equates to approximately 7.2% per annum, please note this is not guaranteed.

BIPS invests in a diversified mix of high-yield bonds from different industries and regions. Instead of chasing short-term market moves, the team focuses on the fundamentals - looking closely at a company’s financial health, the sector it operates in, and the wider economic picture. This deep research helps them choose bonds with strong long-term potential. At every step, they also work to manage risk carefully, aiming to obtain capital growth and high income from investment.

---

Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Invesco Bond Income Plus Limited

Invesco Bond Income Plus Limited has a significant proportion of high-yielding bonds, which are of lower credit quality and may result in large fluctuations in the NAV of the product. Invesco Bond Income Plus Limited may invest in contingent convertible bonds which may result in significant risk of capital loss based on certain trigger events. The use of borrowings may increase the volatility of the NAV and may reduce returns when asset values fall. Invesco Bond Income Plus Limited uses derivatives for efficient portfolio management which may result in increased volatility in the NAV.

Important information

This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

If investors are unsure if this product is suitable for them, they should seek advice from a financial adviser.

Views and opinions are based on current market conditions and are subject to change.

For more information on our products, please refer to the relevant Key Information Document (KID), Alternative Investment Fund Managers Directive document (AIFMD), and the latest Annual or Half-Yearly Financial Reports. This information is available on the website: https://www.invesco.com/uk/en/investment-trusts/invesco-bond-income-plus-limited.html.

Further details of the Company’s Investment Policy and Risk and Investment Limits can be found in the Report of the Directors contained within the Company’s Annual Financial Report.

Invesco Bond Income Plus Limited is regulated by the Jersey Financial Services Commission.