Aviva aims to develop a pension that will guarantee investors get back at least the value of all contributions and tax relief.
The pensions industry has come under pressure from the Government to offer consumers products with “affordable” guarantees.
In a speech in London last week, pensions minister Steve Webb said: “With the dawn of automatic enrolment, the market is growing, so now is the time for the pensions industry to look at the market gap in relation to affordable guarantees and provide the products consumers are seeking.”
Speaking to Money Marketing, Aviva UK Life chief executive David Barral (pictured) says: “Research of our staff and customers tells us there is a gap for a simple, deposit-type fund which guarantees money back plus a little bit extra back.
“Once people start building up a more substantial pension pot they may be willing to take more of a risk to keep their spending power, but the first point is to make sure that they get at least their money back.
“There is a massive gap between where the investment industry has been and what ordinary customers are looking for, so we have to fill that gap and I am determined that we are going to do it.”
Equity Partners UK managing director Kevin Tooze says: “You can not put affordable and guarantee together.
“Pensions should be managed, give tax relief and give you a handsome nest egg to live on in retirement. That is not going to happen if the Government and providers start dangling this carrot of a guaranteed return in front of people.
“If all you are going to get back from your pension is the value of your contributions, you might as well put your money in the bank.”