Securing lifetime income for investors

golden-nest-egg
  • Author : Paul Boston
  • Date : 27 Sep 2019

Protect your customers from running out of cash with our unique Guaranteed Income offer.

You can now offer your investors complete peace of mind with a new way to underpin their essential retirement needs. For the first time, you can include a Guaranteed Income offering within a SIPP, using Novia’s brand new asset type, which also includes a death benefit and cash-in value. This ensures it works for those that live too long, die too quickly or simply change their mind. Paul Boston, Director of Sales at Novia, said:

“The reality is that most people aren’t saving to be rich, they’re saving for the future to enjoy their retirement. It’s a big shift in mind-set moving from a reliance on human capital to a reliance on Investment capital and the stress of running out of money in retirement with no means of recovery upsets the sense of freedom that all retirees should be able to enjoy.”

The Guaranteed Income offer is designed primarily to help people top up the state pension to comfortably meet their essential spending needs, such as food, bills and other household expenses. It ensures a set level of income for life, no matter how long people live for, and regardless of what happens in investment markets.

It gives investors the ability to create a blended portfolio. They can use part of their fund to achieve their preferred minimum level of income. And they can use the remainder to invest in a mix of assets with the potential to generate higher returns. People can also adjust that balance over time, potentially putting more and more into guaranteed income, or choosing to reinvest payments from that fund into other assets.

The Guaranteed Income asset was inspired by last year’s Retirement Outcomes Review 1 Proposing it as an option and giving the client the chance to say no to securing future income for life  will help you be seen as meeting the Personal Finance Society’s good practice recommendations for drawdown and going someway to helping shape the firms policy on dealing with vulnerable investors. It might just help you prevent, or defend against, spurious claims of liability by any profligate investors.

Paul continued:

“This is a new product on the market, it’s unique in taking away all the worry of running out of cash if you live too long or losing it to an annuity provider if you die too quickly.”

But perhaps you think this all sounds too much like an annuity? Well, it’s similar in principle, but the Guaranteed Income asset can be held as part of a wider investment portfolio on the Novia platform, offering far greater efficiency, flexibility and improved reporting. And it also includes a cash death benefit in the early years at no extra cost, as well as a cash-in value.

Payments from the Guaranteed Income go directly into the SIPP cash facility. The investor can choose whether to withdraw them as income or reinvest them for growth into other assets held within the SIPP.

Moreover, the death benefit is also paid as a lump sum into the SIPP account, so that investors’ heirs can benefit free of inheritance tax. Finally, if investors have to respond to a change in personal circumstances, they can use the cash-in option to gain fast access to an extra pot of money.

To find out more about Guaranteed Income and the benefits it could offer your clients, check out our webpage or get in touch with your Novia Account Manager on 0345 600 3055.

References:

1. Retirement Outcomes Review  – (FCA MS16/ 1.3, Clause 2.11), FCA, 2018

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