Adviser platform Novia Financial has launched a guaranteed income product to be used within a Sipp.
Offered via a tie-up with Just Group, the solution provides a personalised income for life, based on the client’s age, individual medical condition and lifestyle factors.
A death benefit starting at 75 per cent of the initial investment is paid as a lump sum into the Sipp cash account during the early years, and the solution also provides a cash-in value to meet a change in the client’s circumstances.
Designed specifically for platforms, it allows advisers to implement a flexible investment strategy within a client’s Sipp portfolio, using the income guarantee to underpin a portfolio.
Novia operates a tiered charging system for its product wrappers, starting from 0.5 per cent for investments up to the value of £250,000 to 0.15 per cent for investments valued at more than £1m.
Bill Vasilieff, CEO at Novia said: "Since the pension freedoms came into force in April 2015 there has been pressure on the industry from the government and the regulator to provide a truly innovative solution addressing the challenges of flexibility and security in retirement planning.
"There is demand from investors who want a degree of certainty, but do not want to purchase a more restrictive annuity.
"They are looking for new ways in which they can sustain a regular income. The technology and tools available in a platform Sipp mean that an investor can invest to provide a sustainable income as part of a complete retirement strategy and benefit from the transparency, flexibility and consolidation that investing via a platform provides."
Stephen Lowe, director at Just Group said: "This is the first of a new style of product that aims to deliver three key components of retirement planning – the security of an income for life combined with flexibility and death benefits.
"We are pleased to have worked in collaboration with Spire Platform Solutions and Novia to bring this innovative solution to market."
Scott Gallacher, chartered financial planner at Rowley Turton, said: "Retiring clients typically need a high level of income but also want security and to be able to pass on the capital to their children.
"These are somewhat conflicting aims; consequently guaranteed income products such as Novia’s new offering are a welcome addition to the retirement planning toolkit."