As revealed in this week’s Money Marketing, the firm is reducing the level of guaranteed income by 1.5 per cent for new business across all age brackets on its Income for Life product from March 31.
The single-life guaranteed income rate for a 55-year-old will now be 3 per cent while the joint- life rate will be 2.5 per cent. For a 60-year-old, the rates on offer will be 3.5 per cent and 3 per cent respectively, a 65-year-old will get 4 per cent or 3.5 per cent while a 70-year-old will get 4.5 per cent for single life or 4 per cent for joint life. The single-life rate for a 75-year-old will be 5 per cent while a joint life will be 4.5 per cent.
Aegon is reviewing the price of guarantees for its Five for Life and Investment Control products.
Money Marketing last week revealed that MetLife was inc-reasing the cost of its income for life and capital guarantees as well as reducing maximum equ-ity exposure. The Hartford is believed to be cutting the maximum equity exposure it offers on its guaranteed retirement income plan in a bid to de-risk.
Aegon Scottish Equitable spokesman Mark Locke says: “We set the guaranteed income levels in a very different economic climate. Against this backdrop, we have chosen to act to protect the integrity of our guarantees for our customers. The guarantees still represent good value for money and if conditions improve and the underlying investment increases in value, so does the guarantee.”
The Retirement Adviser head of retirement planning Nick Flynn says: “I do not think Aegon are trying to get some extra pro-fit, it is just the reality of a volatile market but it will not make the product more attractive.”