UK mutual funds provider Fidelity International has begun offering an alternative approach to accumulating savings in preparation for retirement with the launch of a new suite of investment products designed to give consumers greater flexibility and control over their lifetime savings.
The Fidelity retirement funds enable investors to build up an investment portfolio during their working lives and then draw an income that should rise over time from these assets at a date of their choice. Unlike traditional pensions in annuities, retirees have access to their capital at any time and can pass on any remaining assets to their families.
The funds can consist of a mix of assets, including shares, bonds, cash, commodities and property securities, allowing savers to have the maximum balance of investments to generate an income that aims to stay in line with inflation over a retirement that could potentially stretch over decades.
Richard Wastcoat, UK managing director for Fidelity International, said: Improvements in life expectancy mean that people will need to manage their investments for the long-run, to draw down their savings at a sensible rate and to take action to insulate themselves from the effects of inflation. This is what the Fidelity retirement funds seek to do. You decide when you want to retire and we take care of the investment issues.
Features of the fund have been created based on conclusions from the company’s own research, which indicated that, by keeping nearly a third of the portfolio invested in shares, property securities and commodities, with the balance in fixed income and cash, a fund can produce a reasonable and stable income while still allowing the underlying assets to keep pace with inflation over the long-run.