12th June 2014

Prudential: What’s on the inside matters

For some, computers badged with the 'Intel Inside' logo promise a better and more reliable user experience. People who enjoy the outdoors recognise that Gortex on their labels may mean better protection against the elements. And Mercedes drivers know they are in for a pulse racing experience with AMG on their boot. Intel, Gortex and AMG all bring something to the party that a base manufacturer cannot offer or cannot do as well.

Providing something extra

Prudential's Trustee Investment Plan (TIP) also brings something to the party that SIPP and SSAS providers can’t offer. It helps to extend the scope of what you can offer by bringing access to funds that many clients will find attractive for part or all of their holdings backed by a financially strong provider. TIP is an open ended plan that can be purchased by the trustees of a registered UK pension scheme in the name of an individual. For SSAS's, purchases can be in the name of the scheme. With no entry or exit charges, and with attractive discounts starting from only £50,000, it provides clients and advisers with enormous flexibility whether they are building up their funds or looking to draw down.

Wider access to funds

Through Prudential's TIP you and your clients can access our flagship funds: With Profits and the PruFund family of funds. These funds aim to smooth out the short term volatility of the underlying assets - useful perhaps as a counterbalance to riskier or less liquid holdings such as property. Regular withdrawals up to 7.5% per year (starting from the first anniversary) can be paid to the client or retained to cover scheme expenses, such as borrowing costs. Any payments from TIP are paid to the pension scheme trustees to distribute in accordance with the rules of the scheme. With Profits has the additional benefit of having a guarantee of no MVRs (Market Value Reductions) for regular withdrawals.

Helping to provide target returns

Each PruFund has an Expected Growth Rate (EGR) which is the annualised rate of growth we expect will apply during the next quarter - currently ranging between 6.9% and 7.9% before annual management charges and ongoing adviser charges - which provides a useful starting point to target a planned income shape or potential for growth. Furthermore, we also offer 8, 9 or 10 year guarantee options at an additional charge for the return of the original investment (less any withdrawals) on our PruFund Protected Funds. As well as EGRs, we use unit price adjustments, which can be down or up, to keep the smoothed price of units in line with the underlying assets of the fund.   

For your SIPP and SSAS clients, perhaps now is a good time to add the badge of Prudential’s TIP to your retirement planning. Please contact your Prudential Account Manager for more information, call 0808 234 0808 for an illustration or visit www.pruadviser.co.uk/tip

Pensions, Tax, Trust & ISA