Pension provider MetLife has launched a life bond, Income for Life, with the choice of investing in either a defensive, conservative or cautious underlying portfolio.
Another choice for investors is whether they select the option that locks in positive gains every year, capped at 10% pa, or uncapped positive gains every two and a half years. On the portfolio review date, any increase in the portfolio value is locked in, capped at 10% pa for the annually-observed option.
"Guarantees have proven themselves to be key in the retirement planning and long-term savings market, and demand has grown strongly in the past year from advisers and clients," said UK managing director Dominic Grinstead. "Income for Life has been designed specifically to address that by offering increased choice of guarantees so that more clients can opt to invest. Offering both capped annual and two-and-a-half-yearly uncapped step ups is a major advance for the bonds market, but we are all aware that guarantees have to be competitive and credible."
The standard allocation rate into either an onshore or offshore life bond is 100% and the maximum allocation rate is 102%.
Regular withdrawals may be made every one, three, four, six or 12 months and, in order to increase tax advantage, investors can rebase their investment after five years. Minimum investment is £10,000.
This product is available now in Recent Additions (UK & Offshore and Other).