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MetLife third-way pledges cover capital and income

MetLife has launched its latest third-way personal pension with both income and capital guarantees.

The new retirement port-folio features unit-linked guarantees such as an optional capital guarantee for people saving for retirement, deferred income guarantee for clients looking to delay taking an income and an immediate income guarantee for clients wanting to get an income straight away.

All the guarantees offer 100 per cent performance lock-ins every three years. The product is open to clients aged 23 and over with charges for the guarantees starting at 0.5 per cent.

Minimum investment is £50,000, protected rights are accepted and the product allows regular and single contributions from employers and employees. It is also possible to convert into a Sipp later on and the portfolio is factory-gate-priced to allow customer-agreed remuneration.

MetLife Europe chief executive officer Ed Gardner says: “The risks from rising inflation, stockmarket volatility and the need to plan for potentially up to 30 years of retirement demonstrate the need for new solutions. We believe the new ret-irement portfolio delivers on all fronts and makes unit-lin-ked guarantees a major part of mainstream retirement planning.”

Hargreaves Lansdown head of pension research Tom McPhail says: “We still want to do some hitting it with a hammer to see whether the product stands up and whether it is something we would be happy to recommend to clients.

“But it does look more keenly priced than what it was offering before. The passive portfolios substantially reduce the cost to around 2.5 per cent per annum whereas previously it was up near 4 per cent. Other firms are now looking at passive management as a way of reducing costs so this now appears to be the way that the market is going.”

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