Risk targeted governed retirement income portfolios prove their resilience at five-year anniversary

5 min read

Helen Morrissey, Personal Finance Specialist
Helen Morrissey

Corporate PR Specialist – Long Term Savings


Royal London Governed Retirement Income Portfolios (GRIPs) have reached their five year anniversary  with all five GRIPs demonstrating a track record  of being able to deliver above benchmark returns over what has been a turbulent five years for investment markets.

Despite market fluctuations caused by the US elections, Brexit, Chinese currency devaluation and a range of geopolitical risks, all five portfolios have outperformed against their respective benchmark over the five year period, delivering an average return of between 5.6-10.7% pa, net of a 1.00% charge.*

The GRIPs, launched in August 2012, were one of the first centralized investment propositions (CIP) designed exclusively for customers looking to take a sustainable income from their pension. The Portfolios are based on a diversified mix of assets and are designed to deal with downside risk events, capture market upside and generate a level of growth so customers are able to take a sustained level of income in retirement.

Lorna Blyth, Investment Strategy Manager at Royal London Intermediary pensions commented:

There are still very few multi asset portfolios designed for the pension decumulation market. Yet, the Governed Retirement Income Portfolios are proving that their innovative approach offers customers choosing to go into drawdown the potential for investment growth, while importantly providing sustainability of income in their retirement.

“It is still debatable how well a guaranteed investment approach meets the income and risk needs of drawdown clients particularly given the current market uncertainty. The impact of charges, coupled with a conservative investment strategy and limited upside, means that the amount of income customers may receive with a smoothed fund approach is potentially less than a fully invested strategy. This reserved approach can be compounded as market drops can trigger a seismic blow to a customer’s income sustainability.

Lorna continued:

The Royal London GRIPs show that they have the ability to better cope with downside market risk events than guaranteed alternatives by fully participating in market upside. Our approach is providing reassurance to advisers and drawdown customers that their income is sustainable and is reflected in the interest and increase in business we’ve seen since their launch.

The GRIPs invest in a mix of equities, high yield bonds, corporate bonds, index linked gilts and property funds managed by Royal London Asset Management (RLAM). They also benefit from tactical asset allocation tilts by Head of Multi-Asset at Royal London Asset Management (RLAM), Trevor Greetham and also importantly, a robust governance process. An Investment Advisory Committee (IAC) meets every quarter to review the GRIPs, the investment options and the asset allocations, so customers are reassured that each portfolio is on target to achieve its particular level of risk and income. The governance of the range includes the expertise of a leading risk consultancy, Moody's Analytics, who provide input to the Investment Advisory Committee.

Current benchmark asset allocations for the GRIPs are as follows:

Over £1.3bn is currently invested in the GRIPs by more than 12,000 customers looking for a regular income, through our Income Release product. This volume of business reflects the increased popularity of income drawdown.

Royal London offers a range of retirement planning tools, to help advisers recommend the right retirement income option and investment solutions for their client’s needs, to ensure the future sustainability of their income. Advisers looking for more details on the Governed Retirement Income Portfolios should contact their normal Royal London contact or go to: adviser.royallondon.com/GRIPsTurn5

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Notes to editors:

1. * Royal London GRIPS returns against benchmark over past 5 years to August 2017

Name of Fund Percentage change

Compound annual growth rate %

28/08/2012 to 29/08/2017 28/08/2012 to 29/08/2017
GRIP 1 31.6 5.6
Composite Benchmark 29.1 5.2


Composite Benchmark 35.6 6.3
GRIP 3 49.6 8.4
Composite Benchmark 42.3 7.3
GRIP 4 59.9 9.8
Composite Benchmark 50.9 8.6
GRIP 5 65.6 10.6
Composite Benchmark 57.6 9.5

1. The FCA interim findings of the Retirement Outcomes Review into the retirement income market was published on 12th July 2017. More details are available via the following link: https://www.fca.org.uk/news/press-releases/fca-publishes-interim-findings-study-retirement-income-market shows that twice as many people are moving into drawdown than into annuities. 

2. Past performance is not a guide to the future. Prices can go down as well as up. Investment returns may fluctuate and are not guaranteed so you could get back less than the amount paid in.

For further information please contact:

Helen Morrissey, Corporate PR Specialist – Long Term Savings

About Royal London:

Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June 2018.