Axa Life Invest has launched a new ‘trustee investment plan’, a risk-targeted investment option which it says is designed to react to volatility shifts and protect income in retirement for those remaining invested post-pension freedoms.
The new product is part of the firm’s Secure Advantage+ range of options, in addition to existing accumulation and decumulation pension plans and an offshore income fund.
Offering the full flexibility mandated by the pension freedoms, Axa said the new plan allows people to reduce the effect of extreme market volatility on their pot by reacting to market headwinds by rebalancing the funds’ exposure to risky assets.
The plan runs on fund provided by AllianceBernstein, managed within specific tolerance levels to offer more consistent returns over time.
For those who choose to add on a lifetime income benefit, the plan provides a retirement income guaranteed to cover essential costs in retirement, which is assured for life as long as no additional withdrawals are taken and has the potential to grow over time based on performance.
Simon Smallcombe, managing director of Axa Life Invest UK, said the plan is targeted to self-invested pension customers with medium-sized pots, who in the wake of pension freedoms are looking to take an element of risk but have the option of an element of secured income.
He said: “I think the real battleground is for those customers with pots ranging from £30,000 to £100,000 who will be looking at guaranteed drawdown options.”
“We have listened to customers and advisers, satisfying their demand for a product which protects income, while giving them flexibility to change their mind.”
Andy Zanelli, head of retirement planning at sister company Axa Wealth, said that people are looking for a mix of investments that can protect their pension fund from potentially negative short-term market changes.
“Our research has told us that even with the new pension freedoms people are still looking for some level of financial security in retirement such as guaranteed income,” he added.
Mr Smallcombe also mentioned that since the reforms kicked in on 6 April only 0.01 per cent of his firm’s customers have asked for full withdrawal of their pensions, and of those taking money out it’s only been the smaller pots.
This follows the government’s announcement earlier today that it is set to consult on pension charges, in particular exit fees.