23% income boost for investment-linked annuities

All six main funds available within the product have delivered an increase in income over three years. If a 65-year old customer had invested £100,000 three years ago, they could have selected starting income of £6,100 a year. Today that income would have increased to anywhere between £6,456 and £7,527 a year – that’s up to 23% higher.
 

Andrew Tully, Pensions Technical Director at MGM Advantage said:

"Although past performance is clearly no guide to the future, customers using equities as part of their retirement portfolios will have seen substantial increases in their incomes over the past three years in the vast majority of cases. Investment-linked annuities like our Flexible Income Annuity aim to deliver the best of both drawdown and annuities with guarantees and income flexibility.
 
"With the new pension freedom, people are looking for alternatives to traditional choices. The Flexible Income Annuity delivers a set of features which are unique in the market. The future of retirement income is here today."
 
MGM Advantage research suggests that people are planning to use equities to help them outstrip inflation and manage the rising cost of living in retirement.

Almost a third (32%) of pre-retirees say they would retain some exposure to stocks and shares to offset the negative effects of inflation on their retirement income.