Royal London wants to add a bit more clarity to income drawdown, and they’ve got just the product to do it
Royal London has today launched a product which aims to give advisers a bit more insight into the sustainability of their clients' available income for drawdown.
The Drawdown Governance Service, which is aimed at advisers whose clients hold an Income Release drawdown plan with Royal London, will provide details such as an income sustainability score and easy-to-read reports for use at client reviews.
"For those who choose to use drawdown to provide their income, it is so important that they understand all the risks that could result in their income not lasting into their old age," said Lorna Blyth, pensions investment strategy manager at Royal London.
Income drawdown products allow people to take out money from their pension pot on a regular basis throughout their retirement – for example, to act as an alternative to a salary.
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Research by NMG Consulting found that helping clients to navigate drawdown products has become an increasingly onerous task, with one adviser interviewed remarking that the time taken on such work had doubled over the last 12 months.
Ron Hoare of Fairstone Financial Management, who reviewed the service as part of the NMG research project, remarked: "I can see the Royal London Drawdown Guidance Service being very popular – it is a simple but powerful service that could save advisers time and money as the information is available so quickly and easily."
Royal London, which was among one of the first providers to offer flexible drawdown plans, had over 51,000 income release policies on its books at the end of last year.
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The Royal London product launch comes shortly after the Association of British Insurers and the Money Advice Service revealed that a prototype for a pensions dashboard was in the pipeline. The dashboard will be designed to give people an overview of their pension savings at a glance and, hopefully, make assessing their retirement needs easier.