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Life Trust income plan is long bet, claims McPhail

Hargreaves Lansdown head of pensions research Tom McPhail has branded Life Trust’s new longevity income plan a “gambler’s investment” as it does not return value unless investors live until their mid-90s.

The plan is a lump-sum investment designed to provide an individual with a rising income the longer they live but McPhail calls it a “high stakes” product and says there is only a small window of payback.

McPhail says: “You will not really start getting value for money until your mid-90s.

“If you want predictable and simplistic, you can get it elsewhere at a better price. I do not think it is a bad product but it is pretty niche. It is only going to be sold as a marginal long-stop alongside other solutions.”

Life Trust chief executive officer Andy Briscoe says: “To say it is a gambler’s product is a little judgemental. It is no more a gambler’s product than taking out a pension or insuring your home.

“If you do not live to a ripe old age, the money still goes back to your estate. It is a complementary product. You should still have a pension and other investments but this is a new tool to use alongside your other investments.”

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