Income for Life could suit a wide variety of clients, depending on their individual priorities.
It could be right for your clients if:
- they want a guaranteed income and are willing to pay a charge for this guarantee
- they want their pension fund to remain invested and understand that there’s a risk its value could fall (although their income would still be guaranteed)
- they want their family to benefit from the death benefits available under an unsecured pension if they die before age 75
- they’d like the opportunity to see their guaranteed income rise if investment returns are good and know it won’t fall if returns are poor
- they’d like the opportunity to continue to receive their guaranteed income after age 75 through an Income for Life annuity or an Income for Life alternatively secured pension
A typical client
Mike is 62 years old and looking to retire in the next couple of years. He’s worked for the same major high-street bank since he left university at age 22 and been a member of the bank’s final salary pension scheme since he joined the bank. Mike has two grown-up children from his first marriage and one son (age 15) from his second marriage. His current wife is 55 years old and has some pension entitlement of her own.
Mike’s priorities are to make sure he can cover his minimum monthly outgoings each month and maintain his family’s standard of living when he retires. Because his son is still financially dependant on him, he also wants to make sure that he leaves his family well provided for in case he dies early.
Income for Life would suit Mike because he has a conservative attitude to risk and has had the certainty of a large, stable employer throughout his entire career. He now wants certainty in retirement, and because he still has financial dependants he also needs the death benefits Income for Life can provide.
If Mike decided to keep working on a consultancy basis, he could use Income for Life to cover his basic monthly expenditure. He could then make further contributions into a higher-risk drawdown or phased plan from his consultancy fees, with the aim of increasing his future retirement fund and income.