Around half of UK advisers are using bucketing strategies for clients in decumulation, up significantly from a few years ago. This typically involves two or three portfolios, with at least one of them in cash or cash-like products as a safety net in case of market falls.

Advisers who advocate bucketing tell us that they like it because it’s relatively straightforward to explain to clients. Most clients practise mental accounting in their lives one way or another with special funds for specific purposes. So the chances are they will follow the strategy.

The aim of bucketing is to avoid the sequence risk of drawing too much capital in in market downturns in the early years of retirement. The current Coronavirus-related market falls will be the first live test for many of the strategy since the introduction of pension freedoms in 2015.

We’ve seen plenty of discretionary managers launch model portfolio services over the last year to systematise the allocation between and within buckets. Some systems for moving assets between buckets are more regular and automatic but an element of market timing is inevitable.

‘No plan survives first contact with the enemy’ according to standard military wisdom. So we’d be very interested to hear from advisers how their post-retirement investment strategies are faring in the current environment (no names – no pack-drill).

Platforum has recently published UK Financial Advisers: Retirement Propositions, looking at how financial advisers are managing planning and portfolios for clients in decumulation.