Rockingham’s Rita product is structured as a Sipp with a 10-year fixed term investing in a UK-based cash deposit account, Prudential’s with-profits trustee investment plan and life settlement fund paying fixed interest, the ARM assured income plan.
Rockingham’s literature says: “There is a small element of risk but the level of risk is probably significantly less than the risks you have taken in the past with your pension fund and the rewards are quite significant.”
Yet ARM states on its own website that participation in the ARM assured income plan may involve “substantial risks”.
AWD Chase de Vere senior manager Jason Walker says: “By using a phrase such as ’small risk’, the connotation is not fair when you look at the life settlement market as there are certainly liquidity issues that could cause big issues for someone drawing down a pension in the future.”
Vintage Financial director Geoff Hartnell says: “Traded life settlements have been raised to medium risk as a result of liquidity concerns in the secondhand market.”
Rockingham director of corporate communications Laura Goodman says: “Whenever our clients express an interest in Rita, or ask for a quotation, they are given an ARM risk factsheet, explaining the full risks, as outlined within the factsheet.”