62% of people want a guaranteed income for life in retirement. The ability to provide this, tailored to the individual, using Partnership’s hybrid Enhanced Retirement Account offers the security of an income that can continue to cover the essentials with the opportunity to keep some money invested for the future.
Almost everyone has some element of guaranteed income in retirement, mainly thanks to State pensions, but is it enough?
Why purchase a guaranteed income?
There are many suggestions for calculating an income from a pure drawdown fund but none of them guarantees income for life and may require income to be reduced. Can your client afford this?
Life expectancy affects income planning but is a difficult issue as there are several factors at play, such as genetic, social, health, lifestyle, environmental, regional and wealth factors as well as pure chance. Planning a drawdown strategy may be difficult but can be mitigated by purchasing a guaranteed income for life to cover the essentials.
How much should be guaranteed?
This is dependent on personal circumstances, including:
- The level of everyday expenses
- Protection required for more discretionary spending
- Existing guaranteed income
- Other assets
Many people do not have significant other assets[2]. Protecting their pension will be very important as their ability to recover losses is limited.
Our Target Income Calculator (https://www.partnership.co.uk/retirement-annuities/adviser-support-area/target-income-calculator/) will allow you to work out an appropriate guarantee level for your client and how much a given income will cost. It will even tailor the cost to their health. You can determine how much to purchase as a guaranteed income for life and how much to leave invested for complete flexibility in the Enhanced Retirement Account.
For more details on Partnership’s Enhanced Retirement Account, visit partnership.co.uk or contact us on 0333 043 7008.
[1] Partnership press release, 8th March 2016
[2] Source: ONS: Wealth and Assets Survey, December 2015.
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The Partnership Enhanced Retirement Account is provided by Investment Funds Direct Limited (IFDL).
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.
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), and Partnership Home Loans Limited (registered in England and Wales No. 05108846). Partnership Life Assurance Company Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Partnership Home Loans Limited is authorised and regulated by the Financial Conduct Authority. The registered office for both companies is 5th Floor, 110 Bishopsgate, London EC2N 4AY.