The introduction of pension freedoms has changed the way we fund our retirement, with many more choices now on offer. But, with every option presenting its own set of drawbacks as well as attractions, a hybrid product could be the answer for many people in retirement.
For financial advisers only – not for retail clients
The introduction of pension freedoms has changed the way we fund our retirement, with many more choices now on offer. But, with every option presenting its own set of drawbacks as well as attractions, a hybrid product could be the answer for many people in retirement.
Take withdrawing cash from a pension. It’s attractive if someone wants an immediate lump sum, but it could also push up their tax bill and potentially reduce their standard of living. Similarly, Flexi-Access Drawdown offers flexibility over income streams but the money that's been invested may not grow enough to make up for the amount taken out and it could fall in value, as well as rise, depending on investment performance.
Given these potential drawbacks, it's not surprising that many people want a combination of the security of a guaranteed income with the flexibility to be able to withdraw cash from their pension whenever they like.
Taking this approach has several advantages. As well as providing security and flexibility, if an individual's circumstances change, they could purchase a further annuity or, if their need for income reduces, they could reinvest any income left over from the annuity within the product, which can also help to avoid unnecessary taxation*.
To provide retirees with these benefits, Partnership has launched the Enhanced Retirement Account. This is a hybrid solution built within a Self-Invested Personal Pension (SIPP) to maximise tax efficiency. It comprises three core elements; a guaranteed income for life, provided through an enhanced annuity; a flexible investment element, offering the opportunity to invest any surplus funds in a range of Vanguard's low-cost, passive funds; and a cash account, enabling individuals to consolidate income payments or shelter from volatile markets.
Withdrawals can be taken from the flexible investment element at any time, as regular or ad-hoc lump sums, or to purchase additional guaranteed income for life.
Bringing together these elements within one tax-efficient, low-cost and simple hybrid solution means your clients get the benefits of security and flexibility in retirement.
At Partnership, we can not only offer flexible solutions – but typically, ones that provide a higher income too. Our underwriting expertise allows us to assess each client individually, and offer them a bespoke annuity rate based on their specific circumstances.
To find out more visit www.partnership.co.uk/ERA or feel free to contact us on:
Call: 0333 043 7008**
Email: sandc@partnership.co.uk
*Tax is subject to change and depends on individual circumstances
**Telephone calls may be recorded for training and monitoring purposes. Local call rates apply.
The Partnership Enhanced Retirement Account is provided by Investment Funds Direct Limited.
Partnership is a trading style of the Partnership group of Companies, which includes Partnership Life Assurance Company Limited (registered in England and Wales No. 05465261). Partnership Life Assurance Company Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The registered office is 5th Floor, 110 Bishopsgate, London EC2N 4AY.
Investment Funds Direct Limited (IFDL) are registered in England and Wales No. 1610781 and authorised and regulated by the Financial Conduct Authority. IFDL is part of the Royal London Group, registered in England and Wales number 00099064. Head office; 55 Gracechurch Street, London EC3V 0RL.