Prudential has created a retirement planning product which aims to mirror the flexibility offered through the pension freedoms, while letting savers tap into more than 500 investment funds.
The Retirement Account, which is set to launch on 26 September and will replace the Flexible Retirement Plan, lets savers put money into their pot and take regular income through an account-style retirement plan.
Unlike older-style retirement plans, it also allows savers over the age of 55 to withdraw cash without cancelling the whole account.
Speaking to FTAdviser, Prudential’s head of business development for pensions Vince Smith-Hughes said the account is “slicker” than Pru’s existing products, while providing a guaranteed income, so customers would always be paid a minimum amount of annual income, even if the value of the fund drops to zero.
It also gives investors the choice of 500 funds run by third party investment houses, a marked increase from the 100 funds offered through its existing retirement plans, while still letting investors access the PruRange and exchange-listed stocks and shares.
Mr Smith-Hughes said expanding the range of funds available was a response to demand from advisers who had asked for greater choice of investment funds.
The account, which is a re-work of Pru’s existing offerings, has taken 18 months to develop and Mr Smith-Hughes said Pru had been watching how savers reacted after the introduction of the pension freedoms.
“When pension freedoms first came in, there was lot of people taking a large percentage of their fund in one go, but that tailed off after five or six months, and now people are much more prepared to take a level of income that is sustainable.”
He said none of the pension plans launched since the freedoms had been game-changing but was confident this new plan would alter the marketplace.
“We wanted it to be as seamless as it could possibly be, and be flexible enough to adapt to saver’s changing circumstances”
The offering is also more “IT enabled” than anything Pru has offered before, using a paperless system which links up to advisers’ back office requirements.
John Warburton, chief executive of distribution at Prudential, said: “Significant steps have been taken to banish the rigid pension savings framework that previously existed.
“Pension freedom has made the concept of saving into a pension more attractive by handing increased control to individuals over how they manage and access their retirement savings.”
Having first re-worked the existing products to facilitate certain aspects of pension freedom, Mr Warburton said the new product goes further.
