Retirement Income

ARC's flexible retirement income options

ARC can stay with your client throughout their working life and into retirement. Instead of stopping work completely on a specific date, many people now choose a more gradual transition from working life into retirement, and ARC is flexible enough to support a phased approach. Since April 2015, the rules that define how and when people can access their retirement savings have changed significantly, with flexibility and choice becoming more important. ARC is ready to help you and your clients navigate the new range of options available.

ARC offers a seamless transition from saving to taking an income, with a range of flexible options to suit your clients’ needs. With the ARC SIPP clients can choose:

  • how they take their income and any tax-free cash (after 55);
  • whether they would like some of their income to be guaranteed for life;
  • how much income they take;
  • when they start taking income;
  • to keep their money invested until they need it; and
  • to draw cash lump sums.

Clients now have broadly four income options available to them at retirement:

  • secure drawdown;
  • flexi-access drawdown;
  • annuity; and
  • cash lump sums.

ARC can help you facilitate each of these, or use them in combination to build your clients' overall retirement income.

  Cash lump sum Annuity Secure drawdown Flexi-access drawdown
  Cash in your money, and pay tax on savings over 25%** of your total pot  Guarantees an income for life but with limited flexibility Guarantees a minimum income for life, and lets you make changes if needed Provides an income whilst your fund remains invested but your income is not guaranteed
Guaranteed income for life Not applicable Yes Yes Not applicable
Pass savings to loved ones Yes Extra cost Yes Yes
Make changes if needed Yes Not applicable Yes Yes
Growth potential Yes Extra cost Yes Yes

**The amount of tax-free cash available may vary depending on circumstances and any guarantees previously secured.

Why choose one when your client can have the best of all worlds?

Aegon is currently the only platform in the UK that lets your clients take a combination of these options. So for example, with ARC they could use guaranteed drawdown to cover their essential costs, and invest the rest in flexi-access drawdown, which generally has better growth potential. And if your clients circumstances change, you can move between the two easily. Client income needs are likely to change over time, so the flexibility to make changes to your clients' plans is valuable and it allows them to phase into retirement, over time.

Investments may not meet their objectives, and the value may go down as well as up and investors may not get back the amount originally invested.