View more on these topics

Flexibile annuity from the Pru

Prudential is aiming to give clients greater choice and flexibility with the introduction of its flexible lifetime annuity.

This with-profits and unit-linked annuity has a choice of three investment strategies — cautious, standard or adventurous — plus a self-management option that allows investors to choose their own funds. There are 13 funds available including the Prudential unitised with-profits fund and external funds managed by Merrill Lynch, Newton, Perpetual, Phillips & Drew, and Schroder. Fund switches can be made at any time if, for example, risk profiles change with age.

The money left in the annuity funds of people that die early is divided between the surviving annuity holders in the form of a monthly lifetime bonus.

Unlike some annuities where the level of income is fixed at the outset, investors can vary the level of income they take, as long as it does not exceed their annual limit. However, if their funds are not performing well, investors may find they have taken too much income and will have to reduce the amount they take in the future.

The flexible lifetime annuity is a step in the right direction in terms of choice and flexibility, but one drawback is that death benefit is limited to 10 years. Death benefit under income drawdown tends to be better.

Recommended

Correlation conundrum

Before we move on to the fourth in this short series on investments in the main asset classes – property – let us draw breath and review the correlation between the classes we have looked at and discuss a little further the measurement and the concept of correlation. Before building up the cross-correlations between the […]

INDEPENDENT VIEW

It is time for a reality check. Why do people go into business? Why did you become an IFA? We all have the same reason – to make money for yourself an your family. If you are in business for yourself, why would you take the commercial risks if not to offer the prospect of […]

Paragon launches &#39buy and refurbish to let&#39 deal

Paragon Mortgages is launching a ‘buy-and-refurbish to let’ package as part of its ‘buy to let’ mortgage. It allows investors to buy and then renovate dilapidated property, making use of the tax incentives introduced in the Budget on converting commercial space in to residential use. The package will finance up to 70 per cent of […]

The DIY approach

The coming of stakeholder generally, and the 1 per cent annual charge cap in particular, has certainly concentrated pension providers&#39 minds. In the life office camp, there have been a few abstainers but the majority of leading providers have chosen to enter the stakeholder fray. How do they plan to cope with the 1 per […]

Neptune launches Japan Institutional Fund

By Chris Taylor, Investment Director, Head of Research Neptune is excited to announce the launch of the Japan Institutional Fund on 22 June, having disclosed to the market in March its intention to offer the product. The Fund will be managed by the highly-regarded Chris Taylor, Head of Research and manager of the long-running Japan Opportunities Fund. It will invest in the same underlying stocks as the Japan […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment