Secure Lifetime income
Secure Lifetime Income is our solution that delivers a guaranteed income producing asset which could optimise drawdown portfolio outcomes when included within the SIPP.
As part of a retirement income plan, Secure Lifetime Income could improve client outcomes in a wide variety of circumstances.
Creating more efficient retirement plans
The guaranteed income delivered through our Secure Lifetime Income solution is free from sequence risk and is uncorrelated to the other assets in the drawdown portfolio.
Secure Lifetime Income is built upon the long established and proven concept of pooling longevity risk with other retirees. This means Secure Lifetime Income could generate higher income than conventional bonds, as the income from Secure Lifetime Income assumes bond-like returns plus mortality credits.
As a result, the withdrawal rate on the rest of the drawdown portfolio could be lower. This enables the portfolio to produce:
- higher long-term values, to increase legacy provision; and/or
- more sustainable or higher income.
Constructing portfolios with a guaranteed income producing asset could help evidence that avoiding foreseeable harm has been considered in the advice process.
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Secure Lifetime Income offers benefits to you and your clients
- Secure Lifetime Income complements your existing investment strategies – an alternative low risk asset that can be used when configuring drawdown portfolios to help enhance client outcomes.
- Business efficiency – a fully digital solution that ensures all your clients assets are held in one place, helping to keep set-up and ongoing costs to a minimum.
- Sequence risk management – an additional option for reducing exposure to sequence risk and income volatility, an important consideration for many clients in these uncertain times.
- Reduce the impact of longevity risk – an efficient way to transfer some of the longevity risk away from your client’s portfolio, freeing up capital which can be directed towards other objectives.
- Flexibility and efficiency – the monthly payments can be used immediately to support a client’s lifestyle or retained within their drawdown arrangement and reinvested.
- Simplicity – Secure Lifetime Income sits within your client’s SIPP alongside their other retirement savings and investments, so everything is under one roof.
- Personalised guaranteed income for life – Secure Lifetime Income takes account of your client’s individual health and lifestyle to provide a personalised guaranteed income.
- Legacy provision – Secure Lifetime Income provides protection against early death by offering an automatic lump sum death benefit for a set period while potentially enhancing a client's overall legacy provision.
- A cash in option – Should your client’s circumstances change significantly during the set cash-in value period.
For more information, please refer to the Secure Lifetime Income literature page.
Frequently Asked Questions
What’s the structure of Secure Lifetime Income?
Secure Lifetime Income is a Trustee Investment Plan within a trust-based UK-registered pension scheme.
Who is Secure Lifetime Income for?
Secure Lifetime Income is for individuals looking for a retirement income solution that combines the flexibility of drawdown with the security of a guaranteed income for life. It integrates with a client’s drawdown arrangement, providing a stable income alongside their retirement portfolio. Key target groups include retiring clients that are:
- seeking income security
- needing income flexibility
- concerned about outliving their savings
- looking for a balanced retirement plan
- concerned about market volatility but wanting to keep some investment flexibility
- wishing to enhance legacy planning
- dealing with specific health or lifestyle considerations
On-platform Secure Lifetime Income and off-platform annuity; how do the solutions differ?
Both solutions have different uses for clients depending on individual needs and objectives. The table below outlines ways each solution can help mitigate retirement risks:
What are the minimum or maximum premium amounts, and fees?
The premium limits for platform-based SIPP assets are between £10,000 and £1,000,000. Please contact us if your premium limit exceeds £1,000,000. All costs for providing Secure Lifetime Income are included when we calculate the client’s guaranteed income. There are no further ongoing charges on death or if cashed in. A platform or SIPP charge may apply to Secure Lifetime Income, similar to other SIPP assets. Charges might also apply to income reinvested in the SIPP. The platform will confirm the details of any charges.
Can crystallised or non-crystallised funds be used to buy Secure Lifetime Income?
Secure Lifetime Income is purchased with crystallised funds by SIPP trustees on behalf of a member at the instruction/recommendation of a regulated financial planner. Crystallised funds can only be used to purchase Secure Lifetime Income because it’s a retirement solution providing a guaranteed income for life.
Is Secure Lifetime Income covered by the FSCS?
Yes, it’s protected by the Financial Services Compensation Scheme (FSCS) equal to 100% of the Secure Lifetime Income value.
Are there any restrictions on the type of SIPP platforms that can incorporate Secure Lifetime Income?
We’re in discussions with a number of platforms to introduce our Secure Lifetime Income solution. Currently, it’s available on 7IM and Wealthtime platforms.
What proportion of Secure Lifetime Income can advisers recommend their clients purchase alongside the portfolio?
While Secure Lifetime Income can technically constitute anywhere from 1% to 100% of a portfolio, we usually suggest advisers start with an allocation of 15% to 25%. This range can optimise the benefits Secure Lifetime Income offers, including mitigating longevity and sequence risks while supporting legacy planning objectives.
How does the incorporation of Secure Lifetime Income help align with the principles of Consumer Duty?
Incorporating Secure Lifetime Income helps align with Consumer Duty by ensuring products are designed with the client’s best interests in mind, offering predictable income and helping to reduce the risk of financial shortfall in retirement.
What health and lifestyle factors are considered with Secure Lifetime Income?
Secure Lifetime Income considers an individual’s health and lifestyle factors to personalise the guaranteed income, potentially offering better rates than other income-producing assets.
How does Secure Lifetime Income address longevity risk in retirement planning, and what are the benefits?
Secure Lifetime Income directly mitigates longevity risk by guaranteeing income for life, ensuring clients do not outlive their resources regardless of how long they live.
By pooling longevity risk, Secure Lifetime Income combines the lifespans and retirement assets of many individuals to provide stable, predictable income streams through collective risk-sharing.
This reduces the chance that any one individual will outlive their savings. The benefits to clients include a stable income unaffected by individual longevity risk, improved financial stability in retirement, and the potential for other portfolio assets to remain invested for growth, enhancing overall financial security and legacy potential.
How does the personalised nature of Secure Lifetime Income affect its rates?
The personalised nature of Secure Lifetime Income, considering a client’s individual health and lifestyle, can potentially lead to higher income rates. This personalisation means Secure Lifetime Income can offer tailored income solutions that may outperform the generalised returns of traditional fixed-income investments, providing better alignment with the client’s financial needs.
How does Secure Lifetime Income work and affect the overall risk profile within a decumulation portfolio?
Secure Lifetime Income functions as a drawdown asset within a decumulation portfolio, providing a fixed guaranteed income that is unaffected by market volatility. By integrating Secure Lifetime Income into a decumulation portfolio, it helps reduce sequence of returns risk and longevity risk, thereby enhancing income stability throughout retirement. Secure Lifetime Income allows for a portion of the income to be guaranteed, reducing reliance on other portfolio assets for income. This, in turn, enables the remaining assets to be invested with potentially more growth-focused strategies without increasing the overall portfolio risk, thus balancing income security with investment flexibility.
What are the tax implications of integrating Secure Lifetime Income into a decumulation portfolio?
Payments from Secure Lifetime Income are paid gross into the SIPP Cash Account. From there, they are treated like any other SIPP payments, depending on the client’s tax status. This should be evaluated as part of the client’s broader tax planning strategy.
Our partners
We’re working with a range of partners to bring you Secure Lifetime Income. Find out more here.
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