Pershing looking into hybrid retirement product

Pershing looking into hybrid retirement product

Pershing, a subsidiary of BNY Mellon, is looking at launching a pension product that combines income funds, protection and annuities, Mark Vasey has said.

The director of Pershing, a subsidiary of BNY Mellon, said the advent of pension freedoms would need new products that did not yet exist.

He said: “Something that has been talked about a lot in the marketplace is income funds, alongside protection, alongside late-stage annuity products, and BNY Mellon is looking at solutions that can be brought to market to do that.

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“We can provide all the physical products and we are quite keen that we can come up with something that’s new and innovative in that space.

“We have got the building blocks and we are working with clients to design something for the underlying investor.”

Mr Vasey also predicted changes in pension taxation, potentially in the Autumn Statement, because it would allow chancellor George Osborne to bring forward tax revenues.

He said: “There will be a need for a new product. There will be the introduction of a new pension Isa-style product which will have controls and lockdowns.”

Since the advent of pension freedoms a number of different companies have advocated blending different products over the course of retirement.

Independent pensions consultant Billy Burrows, who has recently published a report commissioned by LV= into blended products, has advocated this approach, but said there are not currently any single products allowing it to happen.

He said: “For most people the best outcome is gained through a combination of products rather than a single product. At the moment there is no single product that blends products, it is about the advice. But you will soon see companies coming up with hybrid solutions.”

Adviser view

Chris Daems, director of Kent-based Cervello Financial Planning, said: “As the nature of retirement and the way people plan for retirement changes, the products used to deliver these solutions also need to change.

“Blended solutions may be one of the ways to accommodate these changes.

“However, these products need to avoid further complicating the market and instead should focus on delivering solutions that suit approaching pensioners.”

Note: The intro to this story has been changed at the request of Pershing.