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Zurich launches target-date funds to meet post-freedoms demand

Zurich is offering pension customers 12 new target-date funds to meet changing appetites ahead of the new freedoms coming into force.

The new funds, managed by Threadneedle, are designed to target either cash, an annuity purchase or entering drawdown, aiming for retirement between 2017 and 2026.

Target-date funds group investors with similar retirement dates together, gradually de-risking investments over time.

“Long standing” customers with Allied Dunbar policies will also be offered the funds, but not retail customers.

If savers choose to target drawdown they will move into the Schroders Flexible Retirement Fund after they retire. The fund aims to produce returns of inflation plus 2 per cent over a three-to-five period and limit losses to 8 per cent.

Zurich UK Life head of in-force propositions Gareth Jenkins says: “By introducing these new funds we’re using our expertise to help customers manage their investment risk so they can meet their retirement income objectives – whether buying an annuity, taking flexi-access drawdown or taking cash.”

“We hope that these enhancements to our retirement proposition will empower customers and advisers and help them make the right decisions now to secure their financial futures for the longer term”.  

Customers are being contacted later this month with details of the new options and will be encouraged to take advice before making a decision, Zurich says.

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