Type: Menu-based retirement plan comprising an individual personal pension plan, an unsecured personal pension plan and a unit-linked annuity
Minimum premium: Lump sum £50,000, regular premiums of £5,000 a year or £500 a month accepted on i2Live Accumulator after lump sum paid
Minimum-maximum ages: i2Live Accumulator – 18-74,, i2Live Drawdown – 50-74, i2Live Annuity – 50-89
Fund links: Two internally managed funds and 66 externally managed funds from 14 fund management groups
Allocation rate: 100%
Charges: £200 a year administration charge, 0.95% a year for income guarantee, Fund charges 0.7-1.8% depending on fund chosen
Options: Income guarantee on i2Live Drawdown and i2Live annuity, open market option available on i2Live accumulator and i2Live drawdown
Commission: Initial up to 3%, renewal up to 1%
Tel: 0845 642 2222
Lincoln Financial Group has brought out a menu-style retirement plan comprising an individual personal pension, an unsecured pension plan and a unit-linked annuity.
i2Live accumulator, the personal pension element, allows clients to consolidate the majority of their pension assets under one plan. i2 Live drawdown provides flexible income up to age 75, while i2Live annuity provides an income for life, with a range of death benefits available to suit dependents’ circumstance.
Informed Choice joint managing director Martin Bamford says: “Lincoln recognises that the retirement options market is complex and has chosen to limit distribution of this product through financial advisers.
However, he believes that the convenience of having these three product types under a single wrapper is outweighed by the drawbacks. He highlights a lack of protected rights, a confusing income guarantee option and lack of brand presence in the UK market.
“The personal pension segment excludes protected rights, which reduces the effectiveness of this product from a consolidation perspective.
“The value of the maximum supported income and income guarantee under the two retirement income segments of this plan are also questionable. It is unclear what connection the maximum supported income has with the maximum income permitted under the unsecured pension option.”
Bamford also thinks the cost of the income guarantee option looks expensive, but he adds that there is nothing in the UK market to compare this with. “A well managed and regularly reviewed unsecured pension does not need this income guarantee and if a client is so cautious they require it then they should not be in unsecured pension in the first place,” he says.
Scanning the market for products that could compete with Lincoln’s offering Bamford suggest any personal pension, which allows unsecured pension, particularly if they allow protected rights. “The personal pension from Winterthur would be a main competitor as it also targets the ‘new model’ adviser. It does not offer a unit-linked annuity but we would not consider this as an important selling point anyway.”
Bamford also thinks that once protected rights funds are accepted within Sipps, these will also provide strong competition. Bamford concludes: “Lincoln is offering a unit-linked annuity which has, to date, proved to be an unpopular option in the UK market. It will face a challenge in its attempt to build a strong market presence in the UK retirement planning market as it does not have good brand recognition with consumers or advisers.”
To build better market presence, Bamford thinks Lincoln will need to get boots on the ground and start building relationships with advisers but he warns that this does not happen overnight.
“The factory gate pricing option is good for fee-based advisers but Lincoln should not limit the remuneration levels under this option. Factory gate pricing is about letting the adviser set the terms of their remuneration in consultation with the client; with no product provider involvement.”
Suitability to market: Average
Adviser remuneration: Average