Aegon has launched a unit-linked guarantee product for its Retirement Choices and One Retirement platforms.
The firm already offers unit-linked guarantees – a blend of drawdown and guaranteed income – but says this is the first time a provider has made the products available through a platform.
Aegon adds the new product, available from today, has been specifically designed for the pensions market, while previous offerings were targeted at bond investments.
Secure Retirement Income is advised-only and has a minimum investment of £20,000.
For clients taking an income at 55, the guaranteed income is 3.2 per cent, rising to 4.05 per cent if income is first taken at 65.
Customers choose between investment in a cautious or conservative fund, with equity weighting of 40 to 45 per cent and 30 to 35 per cent respectively.
There is a 0.53 per cent fund management charge and a 0.3 per cent product charge. In addition, customers pay a guarantee charge between 0.9 per cent and 1.55 per cent based on their selection of enhanced death benefits.
In total, charges range between 1.73 per cent and 2.38 per cent.
Investors are able to come out of the guaranteed income whenever they want and move funds into other investments on the platform.
Aegon UK managing director of retail Duncan Jarrett says: “There’s a lot of interest in the product from advisers. We are going to be the only player in the UK that has put this sort of product into platform technology.
“Once the product’s on a platform you are able to dial up and dial down the investment so you can choose how much you want in the guaranteed option and mix it with other investments.”
Some unit-linked products have been criticised in the past for being high cost and leaving investors little chance of upside after fees are taken.
But Jarrett says: “This buys you a guaranteed income, the ability to pass on your fund on death in totality, the flexibility of drawdown and the ability to move funds between those areas.
“I think the cost is pretty minimal when you compare what you can and can’t do in the market right now.”