Aegon launches new guaranteed at-retirement product
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Aegon has launched a secure income option on its investment control bond, which gives a guaranteed income of 5 per cent of the original investment over 20 years.
Each year on the bond anniversary, if the value of the bond grows to more than the original investment, the growth is locked in and returned to the customer at the end of the term.
Additionally, the secure income option allows customers to cover their own life and up to three other people by offering an inheritance benefit of the highest of 100.1 per cent of the cash-in value, the original investment less any income taken, or the highest recorded fund value, recorded on the anniversary, less any income taken. The bond can be placed in trust.
In June 2009 Aegon announced it was pulling its five for life product, which offered a minimum 5 per cent guaranteed income for life from age 60. At the time Aegon said the move reflected “prevailing market conditions”.
Aegon individual marketing communications manager David Aaron says: “The UK at retirement market is core to the future business strategy of Aegon. With the new secure income option on our investment control bond we are meeting the needs of our customers who are looking for security and peace of mind with their investment.
“Recent market volatility is likely to make investors even more cautious, especially those approaching or in retirement and therefore make them even more likely to look for products offering guaranteed levels of income.”
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Readers' comments (9)
Anonymous | 19 Jul 2010 4:56 pm
And a guarantee from Aegon is worth...?
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David Trenner - Intelligent Pensions | 19 Jul 2010 6:27 pm
5 for Life? No, for just 20 years! Isn't that called a return of capital???
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John | 20 Jul 2010 8:41 am
I'd have my reservations about using the guaranteed suite of a company that was seriously questioning its place in the UK market about a month ago.
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Pete Wright | 20 Jul 2010 9:47 am
It is better that companies are providing a range of solutions for the IFA community. This product could be useful for trustee work particularly with nervous trustees.
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Anonymous | 20 Jul 2010 11:58 am
I really wouldn't like to be going into this form of Product with such an unstable company any time soon.
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Derek Smith | 20 Jul 2010 12:11 pm
Well, yes it is a return of capital but surely the point is that the return is guaranteed!
There are a number of clients who will find this attractive - income guaranteed for 20 years, with a possibility of some additional growth....could be a good solution for those of a nervous disposition!!
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john | 20 Jul 2010 3:28 pm
I find it mindblowing that people do not see the value in guaranteed products
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Justin Stone | 21 Jul 2010 10:41 am
Variable annuity products/guarantees have been some of the best investments of the past decade. Clients want guarantees, they dont want fancy funds and they do want to know that they can retire with dignity. Guaranteed products are a fantastic solution for clients 'core' income needs. The US have $1 trillion in assets under management in these products and the UK market is growing in this field. I think Advisers/IFAs have a duty of care to be educated/aware of all the facts related to these products and should also be asking clients - would you like a guarantee......
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Barry | 23 Jul 2010 11:01 am
Guarantees are still a relevant and important solution for certain clients. My concern is over the stability of Aegon in the UK with all the issues they have over repayment of debt to Dutch government, many people dont seem to be concerned with this, surely this will impact on future returns and/or financial stability.
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