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March 10, 2009

Prudential launches Income Choice Annuity

by Gill Montia

Story link: Prudential launches Income Choice Annuity

Prudential has launched a new annuity aimed at those with over £10,000 in their pension pot, after tax-free cash has been taken out.

According to the life assurer, the Income Choice Annuity gives retirees a more flexible way to fund their futures because it offers a choice on the level of monthly income.

The sum can be reviewed bi-annually and changed when required.

As income is linked to the performance of Prudential’s with-profits fund there is also potential for growth, which could keep inflation at bay.

The annuity offers a joint-life option that pays an income to a dependant, usually for the rest of their life.

It also includes a payment guarantee period whereby beneficiaries are paid an income for a limited time, if the annuity holder dies within a certain period.

Prudential’s annuities business director, Karin Brown, points out that in many cases retirement last for 25 years and she believes that: “People in retirement should be able to choose an income level which suits their changing needs and has the potential to grow throughout their retirement.”

According to Prudential, the majority of people in the UK have less than £20,000 with which to buy their annuity.

 

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