Aegon UK has launched a “third way” product on its platform, which it claims provides the benefits of drawdown and an annuity.
The product, called Secure Retirement Income, builds on the success of Aegon’s variable annuities in the US, where Aegon sells US$7bn (£4.4bn) worth of them a year.
Duncan Jarrett, managing director for retail at Aegon UK, said: “Annuity sales continue to fall as people seek greater flexibility and higher returns. And yet our research found that income certainty is the most important retirement income feature.
“There’s a clear gap in the market for services that provide the income certainty of an annuity with the flexibility of drawdown, and we believe these services have come of age.”
The product will mean customers keep their pension invested but Aegon provides a guarantee on the minimum income they will receive.
Adviser view
Simon Torry, a chartered financial planner with Essex-based SRC Wealth Management, said: “For some people Secure Retirement Income will offer flexibility without the risks of drawdown, and I am sure it will plug a gap.
“The more choice consumers have the better, but it will take some time to settle.”
