UK insurer Prudential has launched a with-profits annuity with protected rights, enabling advisers to utilize protected rights funds to purchase a Prudential with-profits annuity, available from February 8, 2007.
<p>Prudential is the first establishment to offer this type of product, which provides customers with a guaranteed income for life and their fund invested in a leading with-profits funds, as well as security and peace of mind through its minimum income guarantee. <br /><br />In addition to this, the customer will receive one combined annuity payment for the protected rights and non-protected rights elements of the annuity. <br /><br />With-profits annuities link the level of income to the performance of the with-profits fund, which has a mix of assets that, over the longer term, gives them the prospect of income growth. The returns of the investments are paid to customers as bonuses. <br /><br />Currently, regulations require a guarantee that the income from protected rights funds will never be less than the starting level of income, which means a 0% anticipated bonus rate must be selected. <br /><br />Prudential UK head of annuities Aston Goodey said: Our new product will provide more flexibility and options to advisers' customers when approaching retirement. Being able to utilize protected rights funds into one of the top performing with-profits funds enables the customer to make the most of their retirement fund they have accumulated.</p>