20th December 2007

Demystifying the ‘third way’

Demystifying the ‘third way’

• Flexibility
• Control
• And an Income Guarantee Option

Lincoln i2Live has all the answers! (Link opens in a new window)

Getting the most out of pensions

‘Third way’ products offer a greater deal of flexibility, sitting in between old-style annuities and drawdown options. They provide innovative solutions for those planning their income in retirement, enabling clients to keep control of their funds for a longer period.

These products have for some time been commonplace in the US and Japan, where individuals have been able to keep their funds invested until 75 and beyond without the risks inherent in drawdown and the inflexibility of traditional annuities.

Today’s pensioners tend to be more active than previous generations and often need more money to fund their lifestyle as they move into retirement. Due to increased life expectancy, and the likelihood of having to pay for care, it is more important than ever for those approaching retirement to make the right decisions in order to get the most income from their pension. As an adviser, you will know that the choices your clients make for transforming pension funds to income in retirement are among the most important financial decisions they will have to make.

Lincoln i2Live can help

Lincoln i2Live has been specifically designed to provide a pension that suits the way your clients want to live their retirement.

Flexibility: vary income levels as required

Your clients’ pension income doesn’t have to be a fixed amount. Lincoln i2Live allows clients to take more income in some years, less in others, as well as one off payments depending on personal circumstances.

Control: review requirements as circumstances change

Giving clients control over their retirement package is key and regularly reviewing their needs under one plan makes life easier for everyone. Choice is, and has to be, at the heart of retirement planning, helping your clients stay in control of their future.

Income Guarantee Option: a minimum level of income guaranteed for life

One of the most important features of Lincoln i2Live is the guarantee option which, while activated, guarantees 75% of the ‘maximum supportable income’, i.e. the yearly income that the fund could support throughout life. Based on certain circumstances, Lincoln’s guarantee option can be turned on and off on an annual basis, up to age 75, providing security as and when it’s required. If used continuously, the guaranteed level of income is reviewed every five years, so it can grow in line with the pension pot, to ensure that the guarantee remains a valuable feature and a highly effective safety net.

Helping to make things clearer

For more information or to arrange a meeting with a Lincoln Business Development Manager, please call 0845 642 22 22 or visit http://www.lincoln-ifa.co.uk/. (Link opens in a new window)

Lincoln Retirement Income launched Lincoln i2Live, its flexible retirement plan, in May 2007.

• Lincoln i2Live offers three products under one umbrella and allows clients to accumulate a retirement income pot with a range of flexible options on taking an income in retirement. Crucially the flexible income opportunities do not end at 75. Lincoln i2Live takes clients and their dependants through retirement.
  
• i2Live Accumulator is a personal pension plan allowing clients to consolidate the majority of their pension assets under one plan and then build up additional funds taking them through to retirement. The option of phased conversion to i2Live Drawdown and i2Live Annuity is available without additional cost. It offers a wide range of investment fund options which can be continued on conversion.
  
• i2Live Drawdown is an unsecured pension plan providing flexible income up to age 75. Clients can then convert to i2Live Annuity. The fund is available on death to provide a choice of death benefits to suit dependants’ circumstances.
  
• i2Live Annuity is a flexible annuity offering income flexibility for life. It offers income on death to dependants through the joint life option or through the dependant’s guarantee period option. Customers can maximise income if no death benefits are required.