Mon, 26/05/2014 - 10:07
AXA Life Invest has launched Secure Advantage+, a guaranteed drawdown product that is designed to tap into the flexibility and choice made possible by recent pension reforms.
Customers who take out the guaranteed income option can take more income at the start of their retirement – the time when they can enjoy it most – to pay for the higher costs of an active lifestyle.
Unlike annuities, Secure Advantage+ allows customers to remain invested – with the option of taking out a guarantee and thus being protected from market falls. Unlike most drawdown plans, the product offers a guaranteed minimum income for life.
Savers can turn the guarantee off and on when they want to and select different investment strategies when it suits them. In all other guaranteed drawdown plans, the guarantee is mandatory.
AXA Life Invest says Secure Advantage+ addresses the increasingly urgent need in the UK for innovative and well-managed accumulation (pre-retirement) and decumulation (post-retirement) strategies. This holistic approach offers pension savers more flexibility and access to their savings, allowing them the potential to grow their funds and providing a minimum income that they are guaranteed not to outlive, it says.
Despite the freedom offered by new pension reforms, people still crave the peace of mind of a minimum level of income in retirement. In a recent survey conducted with IPSOS Mori, AXA Life Invest found that the majority (76 per cent) of people would be willing to pay an extra one per cent towards their pension pot in exchange for a guarantee on how much retirement income they would receive.
Simon Smallcombe, managing director of AXA Life Invest UK, says: “Today we have launched our answer to savers’ need for flexibility and choice, helping them to obtain enough income to live on when they retire.
“While we have been developing these latest innovations for some time, they couldn’t have come at a better time for UK pension savers. To date providers and advisers have focused largely on asset accumulation strategies throughout the pre-retirement phase. But post-Budget innovation and advice must focus on effective decumulation strategies to support retirees who have active lifestyles and active investment goals in their early retirement.
“While it is clear that retirees should be able to make their own decisions, providers and advisers cannot leave them out in the cold. A guaranteed minimum income remains a definite need for many. Secure Advantage+ offers certainty and peace of mind, with greater flexibility than a level annuity and less financial risk than drawdown.”
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