A leading provider in the enhanced annuity arena, MGM Advantage, is lining up a ‘third way’ product for next year. It is planning to launch a ‘third-way’ unit linked product in 2009 as part of a drive for innovation in the ever growing pension annuities space.
Their sales director Aston Goodey, previously of Prudential, said the plan would be aimed at people aged between 50 and 75, and would be linked to a pension annuity rather than an income drawdown contract. The idea is that it would be asset backed, offer some income protection and possibly some sort of capital protection. Definitely still on the drawing board ! He even likened the product to with-profits annuities.
Interestingly, they are keen to avoid any associations of the product with variable annuitiy contracts, which have so far received a pretty much lukewarm reception in the UK at-retirement market. MGM Advantage claim the market is ‘crying out’ for innovation.
So, the end result is that they are likely to launch a new annuity based contract, with flexibility, but they don’t want it badged as a variable annuity. Interesting dilemma.
