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Hartford bridges annuity and drawdown divide

Hartford Life claims to be the first provider in the UK market to have successfully bridged the void between annuities and income drawdown with a product which pays out a minimum guarantee for life.

The product, called Hart-ford Platinum, covers accumulation and post-retirement, giving clients access to 85 investment funds.

Clients can opt for the guaranteed retirement income plan which lets them lock in up to 10 per cent of the increase of their fund value each year up to age 75. This option charges 0.35 per cent annual management charge but means the client cannot benefit from fund increases of more than 10 per cent.

Clients can also draw a minimum income for life from 55 of between 4 per cent and 6 per cent of their guaranteed retirement income plan. There is a 0.75 per cent annual charge and is based on the original amount invested plus any additional contributions.

The maximum age of entry is 70 and the minimum initial contribution or transfer amount is £10,000.

Other guaranteed drawdown products, including MetLife’s trustee investment plan and AIG’s Living Time product, can lock in returns but clients must buy an annuity or an Asp at 75.

Aegon’s Five for Life product, which is linked to an offshore bond, does offer a guaranteed income for life but has been criticised for having high charges.

Hartford Life managing director JohnEnos says: “This is the 100 per cent retirement solution that other providers have failed to provide.”

WBA managing director Billy Burrows says: “This ‘third way’ for pension products will become increasing attractive to people nearing retirement and offering advice on these products will become as commonplace as advising on annuities.”

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