Fidelity International, a mutual fund manager, has launched a distributing share class on its Retirement Income Fund, to offer investors the opportunity to receive 4% income, paid monthly, directly into their bank account.
The company claims that the Retirement Income Fund was designed to give people greater flexibility and control over their lifetime savings. Retirees can have access to their capital at any time and, unlike traditional pensions in annuities, can pass on any remaining assets to their families.
The asset allocation of the Retirement Income Fund has been specifically designed to provide a sustainable level of income with the potential for this income to grow. To do this, the fund maintains an exposure to shares, property securities and commodities, typically at 30%. The new distributing share class on the Retirement Income Fund will offer investors the opportunity to receive 4% income, paid monthly, directly into their bank account.
For investors who want the flexibility to adjust the amount of income they receive over time, there is the option of using the existing accumulation share class of the Retirement Income Fund in conjunction with the Fidelity Withdrawal Facility. This facility will allow investors to withdraw a level of income of their choice on a monthly, quarterly, semi-annual or annual basis. The minimum withdrawal on the facility is GBP50 and it is free to set up and run.
Peter Hicks, head of IFA channel at Fidelity International, said: Having worked hard saving and investing for their retirement, when it becomes time to start spending that money, people need to think carefully about how much they want and how long they need their pot to last.