Our guaranteed package for you
Does any of the following sound like you?
- You require a minimum guaranteed income for life that can never run out?
- You would like to maintain the flexibility to change your income and be able to access savings at any time?
- You would like the potential for your income to increase if your invested fund increases in value?
- It is important to you to have the potential for a guaranteed value to pass on to your loved ones upon your death?
- Has your drawdown fund fallen in value?
If you have answered ‘yes’ to any of the above, then guaranteed drawdown may be right for you.
What is Guaranteed Drawdown?
Guaranteed Drawdown is designed for savers who are approaching, or who are in retirement. It sits between an annuity and income drawdown. It carries the growth potential of drawdown but also offers a guaranteed lifetime income for the rest of your life like an annuity. We understand that life is complicated, and what you need today may not be the same as what you need tomorrow. Therefore it may be important to you to have the best of both worlds.
No matter how long you live, even if the value of your savings falls to zero, you can still retire without worrying whether market falls will adversely affect your retirement plans.
Income drawdown is attractive to some because of its ability to retain assets within the estate and therefore enable wealth to be passed onto the family after their death. Income drawdown also offers the flexibility to take income when needed. However, with income drawdown alone, investment risk and the potential to run out of money can be a worry. This is where Guaranteed Drawdown fits in.
As well as a secure income for life that won’t run out, Guaranteed Drawdown lets you choose when, how often, and how much income you take. You can access further funds for a one-off income top-up, although this will reduce your guaranteed income. There’s also the potential to benefit from market gains and investment growth through lock-ins of performance, which could increase your guaranteed income in the future. You can also make further pension contributions, to take advantage of valuable tax relief and give your guaranteed income an extra boost.
At a glance
How does Guaranteed Drawdown compare to annuities and conventional drawdown pensions?
Here are some things you should consider when taking a flexi-access drawdown plan with a guarantee
- When and how you take your pension benefits.
- Are you willing to pay a bit more to get a secure minimum income for the rest of your life?
- Think about the amount of tax you’ll have to pay on your regular income or one off lump sum payments.
- Do you have someone that relies on you financially?
We are a chartered independent whole of market financial practise, which means we have been able to team up with Aegon to give you access to their different Guaranteed Drawdown plans to suit your personal needs. These offer a Guaranteed Drawdown that combines the security of an annuity with the flexibility provided by income drawdown. By giving you the protection of a guaranteed income for life, along with the potential to grow your investments, it provides the best of both worlds.
Aegon's guaranteed drawdown solution secure retirement income (SRI), is available exclusively through qualified advisers such as the Pension Drawdown Company and it’s not available direct. Aegon is an international provider of life insurance, pensions and asset management.
With approximately £542 billion assets under management, they have businesses in over 25 countries around the world and around two million customers in the UK alone.
Duncan Jarrett, Managing Director, Retail at Aegon UK said:
"Annuity sales continue to fall as people seek greater flexibility and higher returns. And yet our research found that income certainty is the most important retirement income feature. For advisers and their clients, it may seem like a choice between the certainty of an annuity versus the flexibility of drawdown where returns can be unpredictable and people may have to adjust their income depending on their investment performance."
"There’s a clear gap in the market for services that provide the income certainty of an annuity with the flexibility of drawdown and we believe these services have come of age."
"There is a cost to providing a guarantee but we believe that there is also a clear benefit for customers meaning that should they be unlucky enough to retire into a market downturn, they can sleep easy in the knowledge that their income is protected whilst retaining flexibility over their savings."
How much does Guaranteed Drawdown cost?
A personal illustration will be provided with a quote detailing all the applicable charges, including our advice charge which is based on your personal requirements. However, to help you understand the product feature and how the underlying charges are structured, we have created the below Guaranteed Drawdown comparison table:
(Secure Retirement Income)
|Guaranteed income for life
|Income deferral = 1% pa or higher of monthiversary capital lock in for every year you defer taking an income
|Access to capital
|Flexible income option
|Switch in and out of guarantee at anytime
|Guaranteed death benefits
|57 year old 3.15%
|65 year old 3.80%
|70 year old 4.20%
|75 year old 4.25%
|Product & Investment 0.30%
|Guarantee charge up to 1.15%
|Management charge 0.405%
Plus adviser charge
* Please note the charges are provided for indicative purposes only and based upon a 69 year old with a fund value of £318,000.
This site is intended to be used as a guide to various income drawdown provider plans AND IS FOR UK RESIDENTS ONLY. The Pension Drawdown Company is authorised and regulated by the Financial Conduct Authority. FCA Registration No: 709479