New Direction Finance (NDF) is targeting the pensions drawdown market, with the launch of a retireme...
New Direction Finance (NDF) is targeting the pensions drawdown market, with the launch of a retirement income and growth plan.
The plan has a six year term and allows new and existing investors to draw an income from their pension fund, fixed at either 3%, 5% or 7%pa, depending upon an investor's circumstances.
Investments into the plan are split and invested for both growth and income. The growth quotient gives investors 70% participation in the performance of the FTSE 100, while income is paid out on investments by Abbey National, which guarantees the product.
Monies are invested in two medium term notes, or plan assets issued by Abbey National Funding.
The first will pay the fixed income over the six years of the plan while the second will be used to ensure the original money invested in the capital growth element will be returned in full after six years, even if markets falls.
The amount invested to provide income is not repaid at the end of the term and rates depend upon the level required by investors.
NDF is marketing the plan as an alternative to an annuity, allowing investors access to an income level that could well be superior to annuity rates.
The plan will close on 25 March and minimum investment is set at £100,000 with no maximum.
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected