Key Retirement targets advice to address new pensions freedom
19 January 2015
- New service to deliver advice to address lack of understanding amongst retirees
- Key look to ILC research as foundation for new proposition
Leading over-55s financial provider Key Retirement is launching a new Retirement Options service ahead of the start of the pensions revolution to help savers understand their expanding range of choices.
The announcement comes in the wake of the research paper published by the International Longevity Centre (ILC) "Making the system fit for purpose", which Key helped fund, which revealed widespread confusion around retirement income options. The research highlighted a number of important findings, that consumers have a good insight into what they want to achieve for their finances in retirement, but at the same time had a wide knowledge gap in terms of how to achieve this.
The ILC report also highlighted low levels of understanding around the implications that certain new freedoms may bring; just one in five over-55s with defined contribution pension pots knew what a marginal tax rate was while only half understood what an annuity is and just one in four knew what drawdown is.
Other findings included one in 10 believing that they should withdraw all their money in one lump sum to limit tax bills.
Key's new service will outline all the main options for clients, highlighting the risks and relevance in a format personalised to each consumer. The first stage of the service; the Retirement Options Report, will be provided completely free of charge. It will allow for a much greater understanding of the range of relevant options available, enhancing consumer understanding and leading onto regulated advice and, importantly, the protections that come with that.
Dean Mirfin, group director at Key www.keyadvice.co.uk), said: "The ILC report shows there is considerable confusion about retirement income options but that people do have a good idea of what they want to achieve, which, for the vast majority, is a safe guaranteed income, but they do not know how to get to the right outcome.
"Once they have a good knowledge of their options - and importantly the consequences some may have - they can see the value of advice in helping them achieve what they want."
The new service will launch in February.
Key Retirement is backed by leading private equity investor Phoenix Equity Partners which bought a majority stake in 2013 for £35 million. Recent expansion has included strengthening its proposition for intermediaries in the specialist lending market with the acquisition of leading packager V Loans.
It has also secured a deal which sees it take up a majority shareholding in fixed term annuity provider Primetime Retirement, adding to its existing financial services range which includes retirement income, Wills and Lasting Power of Attorney.