Today we’re launching a new plan specifically designed for those considering purchasing an annuity to fund their retirement in the future.
What is the PensionBee Pre-Annuity Plan?
The Pre-Annuity Plan is a specially designed pension plan that aims to provide a return that broadly corresponds to the cost of purchasing an annuity.
It works by investing your pension into a more stable type of asset called bonds. Bonds are a type of long-term loan taken out by large organisations to raise money. Because bond payments are mandatory, they’re typically considered lower-risk investments than those made in the stock market.
The returns of bonds are used by annuity companies to fund your annuity. If corporate interest rates decrease, bond prices rise and your pension balance would increase. That is helpful because a decrease in corporate interest rates typically results in a drop in annuity rates.
The fund will be managed by State Street Global Advisors, one of the largest money managers in the world.
For more information, view the plan’s factsheet.
Why are we introducing it?
As you approach retirement you’ll start thinking more seriously about the ways your pension can support you financially. One way of guaranteeing a fixed income for life is to purchase an annuity.
We’ve introduced this specially designed fund to emulate the rates of fixed annuities, while you consider your annuity options. This will help keep your pension balance aligned with your objective of purchasing a guaranteed income for life.
It’s important to note however, that like any pension investment, returns are not guaranteed, and that annuity rates will not always match the returns of this plan, which is designed to be held over the medium to long term, in this case, 15 years.
How do you become a Pre-Annuity Plan customer?
If you’re an existing PensionBee customer, head to the Switch Plans page within your BeeHive. Then select the Pre-Annuity Plan.
If you’re yet to join, head over to our plans page to select this plan and sign up.
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.