Amidst fears about Coronavirus and investment market turmoil, advisers and retirees alike are seeking out some security for retirement savings. Are fixed term annuities the safe haven they’re looking for?
They certainly add flexibility to decision making. A fixed term annuity may be a useful solution to consider in helping customers who like certainty and need to make decisions about their retirement but who aren’t ready or able to make long-term commitments. They can give cautious retirees an opportunity to ‘pause’ the big decisions and take a secure, guaranteed option whilst they consider their options and let the dust settle.
A fixed term annuity provides more flexibility than a standard annuity, often with rates that are better than standard cash accounts. It will provide guaranteed outcomes for a chosen period to suit the customer’s needs and can be used to provide either a guaranteed income, a guaranteed lump sum at maturity, or a combination of both. They appeal to customers who are looking for certainty in relation to their income or the outcome at the end of a term. In times of volatility, they can provide an effective stop-gap solution.
The LV= fixed term annuity currently has a minimum term starting at three years to provide flexibility for clients who are at or nearing retirement and are looking for a secure income and tax-free cash while they consider their options.
Whilst we continue to navigate our way through this storm fixed term annuities may well be a welcome opportunity to give both you and your clients' breathing space to consider the options whilst markets settle down.