Months into pension reform – Security of income and access are key

At a time when markets have fallen by around 12% since the pension freedoms were introduced, those retirees in need of income certainty will have had to ride out this continuing volatility.  We’ve seen a high of 7104 on the FTSE 100 and also a low of 5537 and many ups downs over the last 10 months  and, as a result, retirees could be suffering the effects of ‘pound cost ravaging’.
Despite this volatility and uncertainty, figures released today by Aegon have shown the benefits that guarantee solutions are having for consumers. The provider’s key findings – which are based on data analysis of its Aegon Secure Lifetime Income customers from November 2010 to November 2015 – indicate that:

• 100% of customers received their income and had no reduction to their income levels;
• 97% of consumers locked in a higher amount after their first year of investing; and the average yearly income increase was 6.2%.

These figures have been published as part of Aegon ‘Safety in numbers’ campaign, which has been designed to raise awareness of how guaranteed solutions are helping to address the risks attached to the questions of income certainty, volatility and longevity when planning for retirement.
Barry Cudmore, Managing Director at Aegon Ireland commented:
“Following the arrival of last year’s pension freedoms, the market has been forced to grapple with a range of demographic and economic challenges that are changing consumers’ traditional perceptions of what is a comfortable retirement.
“We need to maintain sight of what’s important to our customers. What they value most is the security of knowing that their income is protected no matter what happens in the market and the ability to access their money should their circumstances change.
“Ultimately, these figures underline the benefits attached to guaranteed solutions and why we are seeing guaranteed drawdown solutions being increasingly regarded as the core solution for protecting customers’ essential living needs in retirement.”