The results clearly show that there is a considerable appetite for variable annuity products, and the valuable guarantees they provide.
Around 90% of people surveyed said they value guarantees on their retirement income and, compared to traditional annuities, bonds and income drawdown, nearly 60% (58.8%) said they are most likely to choose a retirement product that provides a minimum guaranteed level of income for life that offers the potential to increase over time.
When asked in the context of the current financial climate if they would now be more likely to consider a variable annuity type product to secure a guaranteed minimum lifetime income, 35% of people said they would.
Gordon Greig, head of individual marketing at AEGON said: "Our research has revealed that larger numbers of people are drawn to products that will provide them with guarantees in the current financial climate.
"The variable annuity market is growing as more customers and advisers become familiar with the ‘third-way' concept. It is encouraging to see people are recognising the importance of this market and the value for money variable annuities provide.”
AEGON has just launched its new ‘third-way' investment product, AEGON Secure Lifetime Income. This variable annuity retirement solution combines the benefits of a purchased life annuity, which provides a guaranteed income for life, and an investment bond, which provides investment flexibility; investment growth potential; and valuable inheritance benefits. The guaranteed minimum income from AEGON Secure Lifetime Income starts at between 3.5% and 5% of the original investment, depending on the age of the customer when they start taking income. This minimum income level has the potential to grow each year in line with any increases to the underlying investment. Once the income level has increased, the new higher amount is locked in and this becomes the guaranteed lifetime income amount - until there is further growth.
