Previously a 60 year old client with a £50,000 pension fund could receive an income of £2,855, but now they could receive £3,188 pa – almost a 12% increase in their starting income.
LV= Head of Annuities and Equity Release Vanessa Owen comments:
“Unlike other major financial decisions, once someone chooses how to structure their retirement income, they can’t typically review their decision further down line so it is important that they purchase a product that ensures their needs are best met both now and in the future. An investment linked annuity provides clients with a flexible alternative, offering the potential for a higher income in the future as well as the ability to guard against the risk of inflation. In contrast, purchasing a level annuity means that, over time, clients will see the value of their income fall in real terms Figures from our State of Retirement report found that one of the key concerns of those approaching retirement is the impact inflation will have on their income and for many it might be worth them considering an investment linked annuity.
“We have increased our maximum AIR so that clients can choose a higher starting income, and our minimum income guarantee gives advisers certainty that their clients’ income will not fall below their guaranteed minimum income. We believe that the enhancement we have made to our offering, along with the recent reduction in our initial charges, makes it an even more attractive proposition and will give advisers yet more reason to talk to clients about inflation-proofing their income in retirement.”
