MGM Advantage’s new flexible income annuity offers the flexibility to change annuity income levels at different stages of retirement, and it also provides a minimum income guarantee as well as death benefits. The minimum investment required in this new product is £10,000 and it is therefore targeted at the majority of UK retirees who are willing to accept a degree of investment risk on some of their hard earned pension savings in the knowledge that it comes with a minimum income guarantee.
MGM’s new product offers access to Vanguard investment funds within an annuity wrapper, as well as a choice of actively managed funds from Jupiter, Newton and also from JP Morgan Asset Management. A cash fund is also available if required from Insight Investment. Chris Evans, chief executive of MGM, stated that the income challenges facing people in their retirement are greater than ever, and are becoming more and more financially pronounced, and conventional annuities will become less effective at dealing with these various challenges.
He added that we need radical change in the industry built around delivering new retirement solutions that are based on providing greater returns and more flexibility. That is why MGM have launched an innovative new annuity product that they believe meets the long term requirements of the changing retirement income market. Further details of the annuity product include a choice of starting annuity income between 50% - 120% of the income that would be available from conventional annuity rates, and the income is fixed for five years with automatic five-year income reviews.
Customers will also have the option to make changes to their income levels and investment choices at any time if required. There is a minimum annuity income guarantee from day one and the option to move to a fixed annuity income basis or to another provider at any time. Aston Goodey, sales and marketing director of MGM said that they believe that there is a large and as yet unfulfilled gap in the developing annuity market which is potentially worth £135bn over the next 5 - 10 years, and this new type of flexible income annuity will appeal to retirees who want the freedom to choose the level of income they wish to receive at various key stages of their retirement whilst offering a way to offset potential negative inflationary effects.
