In a move to adapt to the changing drawdown landscape, Aegon has launched a new pension fund with a risk rating of 1.
Since the reforms came into effect in April, there has been a large surge of people selecting drawdown over annuities. Many of these people aren’t suited or have no experience of investment, however want drawdown for the flexibility it offers. Aegon is the latest provider to try and cater for type of retiree after a flurry of activity in the Guaranteed Drawdown market.
Aegon has designed the fund to be very low risk and I aimed at investors who prefer to have a preservation of assets rather than chasing high returns. It’s a fund which hopes to improve on cash rates but try and protect the downside.
A retree who wants to take advantage of income drawdown is largely faced with a decision expose their pension to stock markets. If there isn’t an appetite for this level of risk, or there’s no experience of investments, this type of fund could well offer an alternative.
“Many pension savers approaching retirement do not want to lose money. Retiready’s Stability fund is designed to minimise market losses while retaining potential for growth above inflation” Said Nick Dixon, investment director at Aegon.