Schroders launches pre-retirement fund in time for April

Schroders launches pre-retirement fund in time for April

Schroders has launched a new flexible pre-retirement fund in response to the radical pension reforms, set to be implemented in April.

The fund, launched today (15 January), will allow pension scheme members the flexibility to take their pension pot as a lump sum, to purchase an annuity or to drawdown over a period of time, depending on their specific individual circumstances.

The multi-asset solution aims to generate returns two per cent above Consumer Price Index inflation over a typical business cycle of between three to five years.

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It also uses a unique risk management overlay targeting a maximum loss of 8 per cent over any investment period - although the firm noted that the target is an investment objective only and does not constitute a guarantee.

The portfolio will be made up of a range of asset classes and benefits from active asset allocation from Schroders multi-asset team.

Tim Horne, defined contribution investment solutions manager at Schroders, said that the fund will allow DC members to take full advantage of the new freedom being afforded to them upon retirement.

John McLaughlin, head of investment for multi-asset and portfolio solutions, added that by combining the latest investment thinking of both the firm’s multi-asset investors and risk management specialists, the team has created a cost effective investment strategy specifically tailored to meet the needs of those approaching retirement.

At the start of December Aegon also gave further details of its retirement proposition, stating that its platform will enable customers and their advisers to combine income drawdown and unit-linked guarantees, via its ‘Secure Retirement Income’.