• Nearly six out of 10 advisers have changed retirement recommendations to include ISAs
• But one in four clients are concerned about impact of volatility on ISA savings
However clients remain concerned about the impact of stock market volatility on ISA investments with advisers saying around 24% are worried that a stock market crash in the run-up to retirement will erode savings.
The increased interest in using ISAs for retirement planning is driving adviser interest in guaranteed ISA solutions – more than 70% would like a capital guarantee on ISAs which lock-in gains, while 73% would support ISAs offering a tax-free guaranteed income for life.
Simon Massey, Wealth Management Director, MetLife UK said: “The £20 billion increase in ISA investments in the last tax year highlights how advisers are right to recognise their importance in retirement planning, which will only grow once the new lifetime allowance comes into effect.
“But the risks of ISA investment in stocks and shares are being demonstrated by the ongoing stock market volatility with the FTSE suffering along with all global markets, there needs to be solutions which can help combine certainty with flexibility.
“Risk proofing retirement remains one of the biggest challenges following the launch of pension freedoms and guaranteed solutions have a major role to play in meeting growing demand.”
The research found one in six clients are concerned about investing in ISAs for retirement as they fear spending the money before they stop work, while 28% of clients worry Governments will change the rules.
MetLife’s Guaranteed ISA offers the choice of income or capital guarantees to deliver increased certainty and flexibility for savers.
The income guarantee takes MetLife’s unique daily lock-ins with a market-leading guaranteed income deferral rate of 5% into the ISA market, enabling savers to access tax-free income.
Customers using the capital guarantees are protected against market falls and have the certainty of a guaranteed amount at the end of their chosen term.
Both guarantee options offer daily lock-ins which can provide a real solution for volatility worries as investors can benefit from the potential stock market gains while being protected from falls. Any increase in the value of a client’s investment above their existing guarantee is locked-in daily.
MetLife has developed its innovative Active Asset Allocation which invests in a combination of the MetLife BlackRock Global Growth Fund and a range of MetLife Fidelity Corporate Bond Funds.
Guarantee charges start from 0.6% on the Secure Income Option and 0.3% on the Secure Capital Option. MetLife’s Active Asset Allocation has a total expense ratio of 0.55%. The annual management charge for the ISA Portfolio ranges from 0.7% to 0.4% depending on the value of the investment. The initial minimum investment in the Guaranteed ISA is £15,000.
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