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Metlife launches new guaranteed bond

Metlife is launching a new guaranteed bond which offers capped and uncapped step-ups on guarantees.

The single premium offshore and onshore product, called Income for Life, allows investors to lock in potential gains every year or every two and a half years with the income and capital guarantees.

The annual step-up is capped at 10 per cent while the two and a half year step-up is uncapped.

The product will return at least the original investment less any withdrawals and death benefits are also payable. Investors can choose from a defensive, conservative or cautious investment strategy.

Defensive offers 30 per cent equity exposure, while conservative offers 45 per cent and cautious offers 55 per cent. These portfolios are mainly invested in UK assets with limited foreign asset exposure.

Investors can rebase their investment after five years to increase the tax advantages. The bond offers terms of between eight and 20 years. The minimum investment is £10,000 with a maximum of £1.5m.

The standard allocation rate is 100 per cent for the onshore and offshore bonds and there is no establishment charge. The AMC for the onshore bond ranges from 0.35 per cent for investments of £250,000 and above to 0.75 per cent for those below £50,000.

UK managing director Dominic Grinstead says: “Guarantees have proven themselves to be key in the retirement planning and long-term savings market and demand has grown strongly in the past year from advisers and clients.

“Income for Life has been designed specifically to address that by offering increased choice of guarantees so that more clients can opt to invest. Offering both capped annual and two and a half yearly uncapped step-ups is a major advance for the bonds market but we are well aware that guarantees have to be competitive and credible.”

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