View more on these topics

MetLife launches ‘lower cost’ guaranteed drawdown product

Pensions-savings-retirement-piggy bank

MetLife has launched a new lower cost guaranteed drawdown product that it claims is the first genuine innovation since the pension freedoms were introduced in April.

Money Marketing first revealed the insurer’s product development plans in May.

The new Retirement Portfolio product allows investors to lock in investment gains on a daily basis. Investors can choose to guarantee their capital through the Secure Capital Option, or their income through the Secure Income Option.

People who defer taking income on the Secure Income Option – which guarantees to pay a set level of income for life – from age 50 receive a 5 per cent uplift on their guarantee rate. This compares to a 3.5 per cent income deferral rate on its existing product.

Savers choosing the Secure Income Option can start, stop and restart their income without incurring extra charges, the firm says. When income is stopped the income deferral increases automatically restart.

BlackRock and Fidelity have been chosen to run the investments for the new offering.

There are also no additional charges for accessing cash or transferring to another provider.

MetLife UK wealth management director Simon Massey says a shift in the way it provides guarantees means charges are “at least 30 per cent lower” than its existing unit-linked guarantee offering.

This is because the provider is utilising Constant Portfolio Protection Insurance, a method of providing guarantees that is less capital intensive than traditional unit-linked guarantees.

MetLife UK chief executive Dominic Grinstead adds: “We believe this is the first income retirement solution specifically designed for the new pension freedoms and presents a genuine solution for customers in today’s retirement landscape.”

Recommended

Massey-Simon-MetLife-620x430.jpg
9

MetLife plans low-cost guaranteed product launch

MetLife is preparing to launch a new proposition which will allow the firm to offer guaranteed products at lower cost, Money Marketing understands. Sources say the firm is designing a Constant Portfolio Protection Insurance product for the UK market which is likely to be unveiled later in 2015. Deutsche Bank is set to administer the […]

Massey-Simon-MetLife-620x430.jpg

MetLife cuts rates on guaranteed drawdown products

MetLife is to cut the rates on its guaranteed drawdown products, blaming a decline in long-term interest rates. In a note to advisers, the insurer says falling expectations of interest rates driven by plummeting inflation, pessimistic forecasts for global growth and dropping oil prices mean it has to cut the terms of its Secure Income […]

To be and not to be – Multi asset investing with conviction

At Pictet Asset Management we believe active management of asset allocation is the most important generator of returns. What is not to be in our portfolio is just as important as what is to be because good performance is determined as much by the assets you avoid as by those you hold. The FP Pictet Multi Asset Portfolio managers are not wedded to any particular […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Not looked at the product closely, but I didn’t know CPPI could provide a “guarantee” – unless there’s a third party providing one. Maybe MetLife are providing the guarantee still.

  2. So it will work in a rising market, but will become cash-locked like every other CPPI product as soon as the market tumbles.

  3. If you lock in investment gains, what about the losses?.

Leave a comment