BREXIT AND DEFINED BENEFIT TRANSFERS WILL BOOST GUARANTEED DRAWDOWN

  • Two out of three advisers believe Brexit jitters and DB transfer rush will boost guaranteed drawdown demand
  • Half of advisers forecast guaranteed drawdown market growth will accelerate over the next two years

 

The Brexit process and growth in the final salary transfer market will be the key drivers in increased demand for guaranteed drawdown solutions over the next two years, new research* from MetLife shows.

Its study found that 65% of advisers believe the guaranteed drawdown market will benefit from the ongoing Brexit process as retirement savers look for solutions which can help combat investment uncertainty.

Advisers also highlight opportunities from the growing defined benefit transfer market as savers cashing in on rising transfer values for switching to defined contribution funds seek safer homes for some or all of their funds.

The MetLife research found 50% of advisers believe growth in the guaranteed drawdown market will accelerate over the next two years with the launch of new solutions from providers enhancing growth.

The research – conducted as part of MetLife’s Quarterly Market Review being distributed to advisers – found 53% of advisers say they now feel obliged to offer guaranteed drawdown solutions to clients looking for investment security and 70% of advisers think that guaranteed drawdown products offer a lower-risk alternative than conventional drawdown or annuities.

Richard Evans, Intermediary Development Manager at MetLife UK said: “Retirement conversations need to change to include a wider range of options and the need for guaranteed drawdown is increasingly playing a central part in this discussion.

“Advisers clearly see guaranteed drawdown as offering security against a range of perceived threats, including Brexit, and as a method of hedging against taking too much risk for those transferring out of DB schemes.”

The role that guaranteed retirement income levels can play in encouraging people to save more is also highlighted by the research, with 52% of advisers believing that the presence of more guaranteed income solutions would encourage consumers to save more for their retirement.

MetLife’s range of retirement and investment solutions have been designed to meet the need for a guaranteed level of income for life in retirement or a guaranteed capital amount at the end of a chosen term, while providing customers with the flexibility to access their investment if needed.

Customers can choose from a range of investments to build a personalised plan suited to the levels of risk they are willing to take, while having the choice of a valuable guaranteed level of income for life from age 55 or a guaranteed capital sum at the end of their chosen term. In addition, the plans offer the potential for client’s to increase the value of their guarantee through daily lock-ins of investment gains while enabling savers with the flexibility to start, stop and restart their income to suit their personal needs. 

Notes to Editors

  • Research commissioned by MetLife and out by Pollright among a sample of 206 specialist retirement advisers in January 2017

       

Important information

  • The value of your client’s investment, and any income taken from it, can go down as well as up and they may get back less than they invested.
  • The MetLife Secure Capital Option provides a guaranteed death benefit or amount at the end of a chosen term. If your clients switch out or cash in their investment before the end of this term, they will receive the underlying value of their investment.
  • The MetLife Secure Income Option provides a guaranteed level of income for life and death benefit. If your clients switch out or cash in their investment they will receive the underlying value of their investment.
  • Tax treatment depends on your clients individual circumstances and may be subject to change in the future, with or without notice.

 

The references to “MetLife” are general references to the group as a whole and not to specific entities within the group. MetLife in the UK comprises a number of different companies.

MetLife Europe d.a.c. is an Irish insurance company based in Dublin with Dirk Ostijn as Chief Executive Officer. MetLife Europe d.a.c. provides financial products into the UK via its UK branch, of which Dominic Grinstead is the branch manager.

MetLife Europe Services Limited is an Irish services company, which distributes MetLife Europe d.a.c.’s products to Independent Financial Advisers via its UK branch. Key personnel within the UK branch of MetLife Europe Services Limited are Simon Massey, Wealth Management Director, Tom Gaynor, Employee Benefits Director and Claire Oldstein, Marketing Director.

MetLife Europe d.a.c. (415123) and MetLife Europe Services Limited (472359) are incorporated in Ireland and are authorised by the Central Bank of Ireland and subject to limited regulation by the UK Financial Conduct Authority and Prudential Regulation Authority. The registered address of both companies is 20 on Hatch, Lower Hatch Street, Dublin 2, Ireland and the UK branch address for both companies is One Canada Square, Canary Wharf, London E14 5AA. Website: http://www.metlife.co.uk

MetLife Europe d.a.c. is affiliated with US-based MetLife, Inc. (NYSE: MET), which through its subsidiaries and affiliates (“MetLife”), is one of the largest life insurance companies in the world. Founded in 1868, MetLife is a global provider of life insurance, annuities, employee benefits and asset management. Serving approximately 100 million customers, MetLife has operations in nearly 50 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com

For further information, please contact:

Jo Riddell
Head of Communications, UK, Ireland and Europe, MetLife