Axa will launch a 5 for life-style product in the autumn, according to Tony Moore, pensions development manager at the group.
Moore tells IFAonline the insurer will develop a product based on its existing SIPP product to combine income drawdown with an annuity.
The model is similar to a product popular in the US, which offers customers a guaranteed income of at least 5% of their investment as in a conventional annuity. The plan also offers clients higher returns from positive market conditions.
Moore says Axa may name the product the Guaranteed Income Option.
He says: “If you look at the way income plans work in America you see five for life. There are a few people dabbling with that in the UK and we’re keen to test the water as well.
“UK providers are looking to pilot it. Within the UK there is some nervousness about companies offering guaranteed incomes. HMRC is encouraging the industry to think of innovative ways to deliver guaranteed income through income draw down plans.”
The model’s exposure in the UK is growing. Last week Standard Life told IFAonline it would launch its version of 5 for life if Government legislation on the maximum payment from income drawdown plans changes.
Aegon launched its 5 for life product in September last year and offers investors a guaranteed income of 5% of invested capital from age 60.
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