View more on these topics

Product Matters

A new annuity product is launched every other month these days, or so it seems.

Some have pushed the boundaries while others have been little more than tinkered me-too propositions. But the new flexible lifetime annuity from Prudential pushes the boundaries further than ever. Given the level of interest in annuities, the timing of its arrival couldn&#39t be better.

The flexible lifetime annuity has a range of innovations. Although I wouldn&#39t go as far as one Pru spokesman who says: “One day, all annuities will be like this.” I think it will be well received – once the details have been thoroughly digested.

In simple terms, the new product is an investment fund from which clients take income. Sounds like income drawdown but it isn&#39t. It is still an annuity and still provides mortality cross-subsidy. This will operate openly through the regular addition of bonus fund units.

The income that can be taken is subject to a maximum, quoted at outset and every three years thereafter, and a minimum which is simply half the maximum. Providing the amount taken is between these limits, clients can vary their payments and take ad hoc instalments as required.

As for drawdown, this flexibility gives tax planning oppor-tunities as well as the opportunity for a tailor-made income.

So with all this (and more) why won&#39t it be a panacea? The principal answer is investment risk which is inherent in the product.

Anyway, if one product could solve all the problems, who would need advice?

David Marlow is head of marketing at The Annuity Bureau


In sickness and in health

IFAs can expect to be targeted by providers of income protection policies in the near future. Income protection is low on the list of products currently sold by most IFAs but that might change in the post-stakeholder landscape. Given the withering of state provision and the corresponding onus on individuals to take care of themselves, […]

Henderson Global Investors – Independent Balanced Portfolio Trust

Wednesday, 21st March 2001.Type: Unit trust.Aim: Income and growth by investing in unit trusts, Oeics and fixed interest securities.Minimum investment: £5,000.Investment split: UK equity income 57 per cent, UK fixed interest 10 per cent, global fixed interest 5 per cent, European equities 10 per cent, UK equities 7 per cent, Asia Pacific 2.4 per cent, […]

Because &#39its&#39 worth it

The investment trust industry has seen its discount fall by over £163.5bn in the last year – that is a lot of shareholder value added. The principal drivers of this narrowing of the discount have been good performance, share buybacks and increased marketing commitment. In March 1999, the industry stood at a wide discount and […]

Pegasus sees sales soar by 51%

Protection specialist Pegasus achieved a 51 per cent leap in new business last year, with sums assured breaking the £163.4bn mark for the first time. New policies totalled 25,302, up from 16,756 in 1999. The healthcare arm of Scottish Mutual says its success is due mainly to the popularity of its long-term care and critical-illness […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm