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Pru launches new with-profits annuity

Prudential has launched a new with-profits annuity that allows pensioners to change the level of income they receive every two years.

The Income Choice annuity provides a guaranteed secure level of income for clients with a pension pot of £10,000 or more after tax-free cash has been taken.

The product also allows income to grow by linking to Pru’s £66bn with-profits fund. The guaranteed secure level will increase if the smoothed return on the fund is higher than the customers’ original secure level.

The firm says the product enables people to build a long-term relationship with their financial adviser by reviewing their annuity income every year and changing it, if they wish, every two years.

Head of business development Vince Smith-Hughes says: “Prudential’s Income Choice annuity provides the flexibility for those retiring to increase or decrease their chosen income level during retirement with the added peace of mind that it has a guaranteed minimum secure level below which it cannot drop. It also represents an excellent opportunity for financial advisers to demonstrate their expertise and build long-term relationships with clients.


Take note of etn dangers

A recent report from Barclays Stockbrokers shows that investors trading in exchange traded funds increased by 162 per cent from October to December 2008, compared with the previous three months.The number of accounts holding ETFs increased by nearly a quarter (23 per cent) and today half of investors hold ETFs within stocks and shares IsasThis is an extraordinary growth story, particularly as it has been achieved in the face of growing economic uncertainty and equity market declines. However, within this trend is a subplot of its own that most investors do not appreciate – the growth of exchange traded notes. ETFs remain the dominant share class with an asset value of £430bn but ETNs now account for £4bn of this and the number is increasing.

Pru annuity features two-year change

Prudential is offering a new income choice with-profits annuity that allows clients to change their level of income every two years.


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