Aegon SEI secures lifetime income
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Income payments cannot start before age 60 but investments can be made from age 45. The amount of guaranteed income depends on the age that payments start and the later they start, the higher the income. If income is paid from age 60, the amount is 3.5 per cent a year but 5 per cent income is paid from age 70.This income is tax free.
The plan's investment fund range provides the potential for income to increase through the income escalator feature. With this feature, the cash-in value of the plan is reviewed at each anniversary and if it is higher than the previous review, the guaranteed income rises by the same amount. Any increases depend on investment performance and will be subject to income tax.
The plan also provides a money back guarantee, with death benefit the higher of the initial investment less income taken or 100.1 per cent of the cash-in value.
Investors can choose from three fund ranges. There are four core portfolio funds comprising different percentage splits of the Aegon UK fixed interest fund and BlackRock UK index tracker fund.
Four multi-manager funds made up of the Aegon UK fixed interest fund and externally managed funds from the create range of externally managed funds recommended by Morningstar. The create fund range itself allows investors and their advisers to select from almost 70 externally managed funds. These are divided into risk categories A B and C. Between 50 and 100 per cent of the portfolio can be invested in category A funds, up to 50 per cent can go into B funds and up to 15 per cent in category C funds.
This product is available without the income and money back on death guarantees, but this means income and death benefits are limited, and investors cannot opt back in to the guarantees at a later date. Taking more than the guaranteed minimum income will also affect future income guarantees and death benefits.
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