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.”