Are retirement guarantee arrangements value for money?

Freed from the constraints of compulsory annuity purchase, customers in the UK retirement market have entered a brave new world of choosing for themselves which retirement product is best for them. However, this is no easy task.

The UK retirement market is now home to a diverse and growing range of products. These products provide different benefits, different levels of financial freedom and security, and they come at a wide range of prices.

Faced with an uncertain future and a desire to enjoy a worry-free retirement, many customers are drawn to the peace of mind that a guarantee provides. But is it really a case of ‘better safe than sorry’?

To answer this fundamental question, Milliman’s actuarial and financial risk management teams have carried out a unique quantitative review of retirement guarantees under an extensive set of different economic and market conditions.

We modelled the main types of income guarantee currently offered in the UK retirement market to find out how much customers really stand to benefit from the guarantees that they are paying for. The results of our analysis were clear.

Read the White Paper.

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