Everybody's talking about income funds but are they really the best way for retirees to benefit from pension freedoms? Nicola Brittain finds out
Following the announcement of pensions freedom last March, income funds have been widely mooted as the fund of choice for retirees. People are more risk averse as they age, and income funds – which aim at low volatility and capital preservation with returns that beat cash – are regarded as a pretty safe bet. There are two types of income funds, but the title normally refers to equity income funds which invest in mature equities sectors and release a dividend of about 3.5% per annum. There are also fixed interest income funds or ‘corporate bonds', comprising loans to businesses tha...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
