Retirement income specialist LV= has launched four Investment Pathways funds designed to provide customers with a range of packaged investment choices as they consider taking an income from their pension.
Investment Pathways is an FCA initiative formed from the Regulator’s 2019 Retirement Options Review. It aims to support customers entering drawdown achieve better outcomes on how to invest their drawdown fund. They will be mandatory from 1 February 2021 for customers seeking to access drawdown on a non-advised basis.
LV= has selected funds managed by Legal and General and Vanguard. Investment management charges start from 0.11% and extensive modelling and independent governance assessment ensure each aligns with the FCA’s four designated customer outcomes (See notes to editors).
LV will use the four Investment Pathways for existing customers who wish to enter drawdown, but expressly without taking further advice and where their decision will be supported by guidance from LV=’s Retirement & Advice Solutions business. The Investment Pathways can equally be adopted and used as part of an advice process by IFAs.
Details of the four funds are below:
| Fund name | Investment Pathway | Statement risk-rating |
Investment management charge |
| LV= Pension Savings Pathway Option 1 | I have no plans to touch my money in the next 5 years | 5 | 0.33% |
| LV= Pension Savings Pathway Option 2 | I plan to use my money to set up a guaranteed income (annuity) within the next 5 years | 4 | 0.24% |
| LV= Pension Savings Pathway Option 3 | I plan to start taking my money as a long-term income in the next 5 years | 5 | 0.11% |
| LV= Pension Savings Pathway Option 4 | I plan to out take all my money within the next 5 years | 2 | 0.16% |
David Stevens, Savings and Retirement Proposition
Director at LV=, said:
“Accessing drawdown is a big decision for pension savers and poses many considerations and challenges for savers, particularly those who are choosing not to take financial advice and may not appreciate all the consequences of their actions.
“The FCA Investment Pathways provides sensible simplifications to help customers make their choices with both more clarity and less risk, and we’re pleased to be one of the first to implement the approach for the benefit of our customers and have achieved this despite all the disruption coronavirus has caused for financial services providers.
“LV=’s Pathway options have been designed to meet the FCA’s requirements and provide savers with simplified options about how to invest their retirement funds, supported by high quality guidance as part of the customer journey and with each fund taken through an in-depth selection process to match the objective selected by the customer. We think the four Pathways investment options will also appeal to financial advisers who are also looking to adopt a set of funds structured to align to their clients’ retirement needs, assessed against the four FCA outcomes.”
About Investment Pathways
The FCA has proposed that consumers should be presented with the following options to help them pick a pathway solution:
Option 1: I have no plans to touch my money in the next 5 years
Option 2: I plan to use my money to set up a guaranteed income (annuity) within the next 5 years
Option 3: I plan to start taking my money as a long-term income within the next 5 years
Option 4: I plan to take out all my money within the next 5 years
For further information
- David Gwyer
- Media Relations Manager – Life & Pensions
- [email protected]
- 07798 796907
- Candice South
- Press Officer - Life & Pensions
- [email protected]
- 07867 141547
About LV=
LV= is a leading financial mutual. When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Financial Services Limited (LVFS) and trading styles of the LV= Group of Companies.Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237 is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, register number 110035. Registered address: County Gates, Bournemouth, BH1 2NF.