Retirement specialist Partnership has launched a self-invested personal pension (Sipp), called the Enhanced Retirement Account (ERA).
Looking to provide consumers with access to a guaranteed income while offering the flexibility of drawdown and an opportunity for investment growth, the Sipp offers a flexi-access drawdown account.
The Sipp will have two basic elements – guaranteed and flexible.
Partnership is providing the guaranteed element (annuity), Ascentric will be providing the flexible aspects of the product while Vanguard is set to provide the investment funds that customers will have access through the product.
All funds held within the Sipp are tax-free and any unused income from the guaranteed element is eligible to be held within the cash account or transferred back into a flexible investment element – it will not incur income tax unless it is withdrawn at a later point.
The Sipp will offer investment funds, a cash account and a guaranteed element – in the shape of an enhanced annuity.
Annual charges for the Sipp are between 0.43 and 0.59 per cent (although this does not include an adviser charge) and there are no transaction fees. The Sipp is only available through independent financial advisers.
www.partnership.co.uk/
An almost hybrid product, this is a ready-made solution for clients who wish to have both the opportunity for flexi-access drawdown and a guaranteed income for life.
The Sipp is available to a relatively large age range. It is available to new customers aged between 55 and 85 with funds of £10,000 to £1m. Crystallised and uncrystallised funds will be accepted.
With charges up to just 0.59 per cent, this is a low-cost product too – although adviser charges have yet to be released, Partnership says just a minority of the funds have a one-off charge to cover dealing costs.
This type of product is not yet common, and it is refreshing to have something like this that isn’t just a glorified multi-asset fund branded just as one suitable for retirement.
This provides two aspects that a retiree will want – flexibility and a guaranteed income. It would not be a bad thing if we saw such products continue to be released.
Typical customer profile:
- Clients about to retire with a pension fund between £30,000- £250,000.
- Clients in need of a known level of guaranteed income for life but want the flexibility to access their fund for ad hoc withdrawals.
- Clients who want everything in one place – one account, one income payment, one P60.
- Clients in need of a tax efficient solution.
- Clients who smoke or who have any health or lifestyle conditions such as diabetes, obesity, heart condition or cancer.
- Clients who are looking for investment growth.
Source: Partnership. Copyright: Money Management.
