National Mutual has become the second provider to launch an Executive Drawdown Plan.
The aproduct is available as a transfer plan or may be written under the rules of an existing scheme.
The plan allows members of schemes to take their tax free cash and draw an income from the remaining fund prior to purchasing an annuity.
The Inland Revenue issued rules on the issue in July 1999.
National Mutual Pensions development manager Richard Taylor says: “Those seeking to maximise their tax free cash entitlement or who cannot transfer to a personal pension may find this an attractive alternative to annuity purchases.”