Just Retirement has unveiled a guide on unsecured pensions (USP) and annuities options, to help advisers better identify the right products for clients.
The firm says in the current economic climate, consumers are concerned about getting the most money out of pension pots but are finding no 'one-size-fits-all' solution.
Just Retirement says USP flexibility is attractive to many retirees - with the prospect of strong investment returns, increasing income levels and tax planning opportunities.
However, it warns clients will need at least £300,000 in their pension pot to maximise USP opportunities.
"The potential for strong investment returns may not always work in the individual’s favour, for as we have seen recently, sudden downturns in performance can drastically reduce sustainable income levels for very long and unspecified periods of time,” Just Retirement head of retirement income solutions Nigel Barlow says.
With the average retirement fund standing at £25,000, Just Retirement feels the vast majority of people needing regular income should consider a lifetime annuity.
Barlow believes annuities can bring greater peace of mind to individuals due to decreased risk.
“In addition to this a person’s state of health and their circumstances could enable them to qualify for an enhanced annuity, thus producing a higher level of income than a standard annuity but with the same guarantees and with the avoidance of risk of a USP," he says.
“This is clearly an area for individual advice but in today’s market the very real benefits of an annuity should not be overlooked – at any age.”
The guide is available to all IFAs who sign up for the Campaign for Better Annuities at: www.justretirement.com/uspguide.IFAonline
Reasons to be cheerful
Total investment reaches £9m
Medium to long-term capital growth