MetLife is targeting the instant savings account market with the launch of a guaranteed Isa, offering the choice of income or capital guarantees.
The MetLife Isa portfolio is a stocks and shares Isa.
MetLife said the income guarantee takes MetLife’s unique daily lock-ins with a market-leading guaranteed income deferral rate of 5 per cent into the Isa market, enabling savers to access tax-free income.
MetLife said that savers can invest in the Secure Income Option from age 50 and take a guaranteed income for life from age 55.
The firm added they will be able to start, stop and restart their income to suit their personal needs and if income is stopped, the income deferral increases restart.
Additionally, customers using the capital guarantees are protected against market falls and have the certainty of a guaranteed amount at the end of their chosen term, the firm said.
Metlife added the Isa provides the potential for growth and locks in any investment growth above the guarantee base daily.
BlackRock and Fidelity Worldwide Investment provide the investment expertise for the funds.
Research among retirement savers aged 45-plus shows strong interest in Isas with two out of five (40 per cent) planning to use some of their tax-free savings for retirement planning.
However, they are concerned about the existing options on offer with more than two-thirds (68 per cent) saying cash Isa rates are too low and 49 per cent worried about stock market volatility.
According to research with advisers, it has been highlighted how they are looking for new Isa solutions for retirement planning - 54 per cent of advisers say they have changed their recommendations on the use of Isa for retirement planning since April and 72 per cent want to see more Isa innovation.
Dominic Grinstead, managing director of MetLife UK, said: “Isas will play an increasingly important role in retirement planning and guaranteed Isas will be a major growth area.
“There is a clear need for innovation which is why we have developed our ground breaking guaranteed Isa as a tax-efficient savings solution suited to the 21st century. Customers can benefit from increased certainty over income and capital, as well as full flexibility in retirement.
“People are already looking for ways to make Isas work better for them and as the market leader in guaranteed drawdown, we believe there is a huge opportunity to increase competition in the Isa market to the benefit of customers and their advisers.”
Justin King, Chartered financial planner at Dorset-based MFP Wealth Management: “Looks interesting at first glance.
“It is good to see product innovation. I can imagine it will appeal to savers who dislike the idea of stock market volatility.”
Daren O’Brien, director at Aurora Financial Solutions, said: “Any new Isa innovation is welcome as we always look to provide a rounded retirement solution for our clients to include a wide diversity of products.
“Clients do like the guarantees and lock-in of gains, however these do come at a premium with higher charges.”
ruth.gillbe@ft.com
