Metlife has launched a new flexible guaranteed drawdown product, with daily lock-ins and an income deferral rate of 5 per cent for savers who can invest in the Secure Income Option from age 50.
According to the provider, the Retirement Portfolio is designed in response to pension freedoms, letting savers start, stop and restart their income to suit personal needs and if income is stopped, the income deferral increases restart.
Savers can also access their investment or transfer out to other pension plans or retirement income solutions without incurring charges, with a capital guarantee option also being offered.
Fund backing is provided by Blackrock and Fidelity Worldwide Investment, with Metlife’s active asset allocation method investing in a combination of the former’s global growth fund and the latter’s corporate bond funds.
The secure income option offers the choice of guaranteed income now, or an enhanced income deferral for those seeking the certainty of a higher future income.
Metlife calculates guaranteed income for life based on the value of a customer’s initial investment and their age when selecting the option. Guarantee charges start from 0.6 per cent on the secure income option and 0.3 per cent on the secure capital option.
The active asset allocation has a total expense ratio of 0.55 per cent and a minimum investment of £30,000 is required in the retirement portfolio.
Dominic Grinstead, managing director at Metlife UK, said: “We believe this is the first income retirement solution specifically designed for the new pension freedoms and presents a genuine solution for customers in today’s retirement landscape.”
The firm’s own research - with 1,164 working adults aged 45 plus by Consumer Intelligence - showed strong support for guarantees, with around 72 per cent of advisers believing clients should guarantee at least part of their income.
Further research among 100 retirement specialists by Pollright in May found 82 per cent of retirement savers want to have most of their retirement income guaranteed.
Tony Springer, a financial adviser at Totus Capital, said the solution provides the flexibility, security and potential for long-term growth that the vast majority of his clients were looking for.
He said: “It fits very nicely between the old school of annuity and capped income drawdown; for us it seems the best of both worlds.”
peter.walker@ft.com
