View more on these topics

Life Trust launches income drawdown tool

Life Trust has developed a new modeling tool which allows advisers to calculate their income drawdown clients’ anticipated future income streams.

Advisers can determine income based on current and future levels of withdrawals being taken within approved limits and compare this against an inflation-linked income target.

The model uses the client’s age, gender and current size of the pension fund. Factors such as tax-free cash withdrawal and early death scenarios can also be applied. It assumes an annuity decision will be made at age 75 but advisers can specify their own assumptions for gilt yields, inflation rates and net fund growth rates. Both single and joint life scenarios can be illustrated.

Life Trust says advisers can also weigh up the client’s current income drawdown strategy against alternative investment plans.

Chief executive Andy Briscoe says: “Drawdown has grown in popularity over recent years but there hasn’t been a simple way for advisers to project their clients’ income streams over the longer term. While drawdown arrangements offer clients more flexibility and liquidity than annuities, they are more exposed to both withdrawal risk and timing risk, particularly when markets are volatile.

“A broad range of options need to be considered in the advice advisers are giving to their clients about how best to fund their retirement years. This new modelling tool not only allows advisers to show clients whether they are likely to face future cash flow issues but also how additional investments, such as the Life Trust LIP, will fit into their retirement planning.”

Recommended

AA breakdown

To the 6,000 ARs who were working for Prudential back in 1991-93, I owe you an apology. Actually, I should only apologise to the several hundred people who came on the asset allocation training courses I ran for Pru but I know the training material was copied and widely used by others.

Tories could ditch personal accounts

Conservative Shadow Work and Pensions Secretary Chris Grayling says the Tories would consider ditching pension personal accounts in favour of auto-enrolling employees to existing stakeholder schemes.

Groundhog gripes

Having spent a few hours last week sitting in the “cheap seats” costing £300 listening to the FSA’s latest update on the RDR, I have now had time to ponder upon what I saw and heard.

Frexit & contagion risk in Europe

Rob Burnett, Head of European equities at Neptune Many commentators have suggested that the UK’s exit from the European Union will trigger a domino effect, leading to its eventual break-up. Is this likely and what is the mechanism for this to happen, asks Rob Burnett, Manager of the Neptune European Opportunities Fund. Read more: https://www.realworldinvestors.com/Posts/Read/1371/Frexit_and_contagion_risk_in_Europe […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment