MGM launches delayed asset-backed annuity
Share
MGM Advantage has launched its long-awaited Flexible Income Annuity.
The asset-backed product lets pensioners change income levels at different stages of retirement and gives the potential for growth to offset inflation. It also provides a minimum income guarantee and death benefits.
The firm says the product is the first in the UK to offer access to Vanguard funds within an annuity wrapper. It also offers a choice of actively-managed funds from Jupiter, Newton and JP Morgan Asset Management, selected by Old Broad Street Research, and a cash fund from Insight Investment.
Sales and marketing director Aston Goodey: “We believe there is a large and as yet unfulfilled gap in the annuity market which is potentially worth £135bn over the next five to ten years.
“This new type of flexible income annuity will appeal to customers who want the freedom to choose the level of income they wish to receive at key stages of their retirement whilst offering a way to offset negative inflationary effects.
“The past two years have been particularly tough for those about to face retirement and our research reveals that for those people addressing their retirement income needs, a key concern for them is to protect their income from the negative effects of inflation.
“That is why our new product enables customers to accept an element of investment risk in return for the potential to grow the retirement income provided by their annuity.”
Directly Financial director Stuart Bayliss says: “Since prior to the introduction of drawdown in 1995, we have been looking for flexible alternatives to the guaranteed lifetime income annuity.
“MGM’s new product offers investment and income flexibility, allowing those who wish to be actively involved in management the opportunity to do so while also offering both a good cash fund and the passive option through Vanguard, a high quality passive investor with low charges who we have used with appropriate drawdown clients for some years.
“At a time in the market when conventional rates are unlikely to offer any improving value, the flexible income annuity should prove a very useful addition to pension income planning.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
Readers' comments (2)
Anonymous | 16 Feb 2010 9:45 am
Its good to see more investment linked annuities coming to the market, but Prudential's Income Choice Annuity and Flexible Lifetime Annuity continue to lead the way.
Unsuitable or offensive? Report this comment
Anonymous | 16 Feb 2010 8:44 pm
This product is a very welcome addition to the market, as I often find clients considering some investment risk are put off by the Pru's Income Choice Annuity being invested in a with profits fund. This MGM product has some great fund options, and I really like the low cost multi asset Vanguard funds.
Unsuitable or offensive? Report this comment