Are alternatives to a pension annuity better?
Apparently, more and more people are considering alternatives to a pension annuity. Two-thirds of IFAs say the ongoing stock market volatility has spurred their clients into changing the way they plan for their retirement, according to research by MetLife. The question still remains: is there something out there better than a guaranteed pension annuity?
According to the research, investors are increasingly asking for advice on alternatives to traditional annuities and drawdown, including pension products with unit-linked guarantees, variable annuities, with-profits annuities and impaired life annuities.
Dominic Grinstead, strategic development and marketing director at Metlife, says, ‘Stock market volatility and growing worries about inflation are raising uncertainty. So it is no surprise that pensions with unit-linked guarantees are becoming more attractive as an alternative to traditional pension products.
‘They address inflation by facilitating exposure to equities, which have an in-built defence against price rises in the long run, and protect pension pots against stock market falls.’
Trouble is, everything has an element of risk to it, and a guarantee has to be a good thing.
