MetLife will be ready for the launch of pension freedoms from April, underlining its confidence that Guaranteed Drawdown solutions are ideally suited to the retirement revolution.
Existing and new customers of its market-leading Retirement Portfolio will have access to full flexibility from April. MetLife believes the need for certainty on income will be even more important when the new rules come into effect, but also understands that customers like to have flexibility should their circumstances change and has worked hard to ensure that new and existing clients and their advisers can take full benefit when flexibility is launched.
Guaranteed Drawdown is expected to see massive growth – market forecasts indicate the sector will take a major share of new business growing to more than GBP48 billion by 2023 from around GBP1 billion in 2014.
However adviser research shows there is concern about providers in general being able to meet demand after April – just one in 10 advisers questioned believe providers are prepared for the launch of pension freedoms.
Advisers believe the major threat to the success of flexibility is the complexity of providers’ back books – around 68% say they are concerned about the ability of providers to adapt existing products to the new regime to meet the anticipated demand.
MetLife’s income and capital guarantees are already well suited for clients who want to benefit from certainty and flexibility by offering a guaranteed income for life as well as the opportunity for growth. Its range includes the innovative Retirement Portfolio as well as guaranteed bonds.
Simon Massey, Wealth Management Director, MetLife UK, says: “As the market-leader in Guaranteed Drawdown we have supported the pension reforms since they were first announced and have worked hard to ensure we are fully ready for the launch.
“The reforms are clearly positive for our business as savers who would have taken an annuity will look at alternatives. Annuity sales are forecast to fall by up to 65% this year but customers will still have a need for certainty and an income for life and not all will want to take risks by going into drawdown.
“Advice will be vital if the reforms are to fully deliver on their promise and providers have a responsibility to ensure they do not rush out solutions or promise things they cannot deliver.”
MetLife has supported the Budget pension overhaul by lowering its minimum initial investment to GBP30,000 to enable more customers to benefit from flexibility and certainty ahead of the new rules.
Its income guarantee products provide a guaranteed income for life with flexibility over when to start and the possibility of growth. From April 2015 customers will be able to take as much income as they like in line with legislation