Standard Life and Fidelity have partnered to launch a new guaranteed pension income product aimed at tackling retirees' fear of running out of money in retirement.

The Standard Life Guaranteed Lifetime Income plan pays an individually-underwritten guaranteed income for life.

It has the added benefit of being held within an individual’s drawdown account, alongside other drawdown investments.

Income from the plan is paid into the client’s drawdown cash account. Any income not required for withdrawal can be held within the drawdown cash account or be reinvested into the investment options available on the platform.

The client will not be liable to pay any income tax until they withdraw the cash into their chosen bank account.

Standard Life is responsible for the creation, administration and performance of the plan which is available through Fidelity Adviser Solutions via its Adviser Solutions Pension Account.

Standard Life said the new plan would allow advisers to offer a guaranteed income to clients on platform, in a way that aligns with their existing advice processes as part of their wider withdrawal strategy. 

Claire Altman, managing director of individual retirement at Standard Life, said the new plan enabled savers to secure the certainty of income while maintaining some flexibility.

She said: “The nature of retirement is evolving. People have more nuanced retirement journeys, with different needs at different life stages, which necessitates a range of different income solutions. Having certainty of income can be a valuable part of this mix, providing a guaranteed income for life, however people also want to maintain a degree of flexibility.

“The launch of the Standard Life Guaranteed Lifetime Income plan addresses this need. Clients are able to decide the amount of income they want to receive, and when, so they don’t have to sacrifice flexibility, while giving advisers the ability to simply and efficiently manage a guaranteed income for their clients on platform along with drawdown funds.”

The plan also includes the option of a death benefit, which protects 100% of the purchase price of the plan and ensures that on the death of a client, a lump sum equivalent to the original purchase price of the plan, less any income already received from the plan, is paid to the deceased’s drawdown cash account.

The Standard Life Guaranteed Lifetime Income plan been built into existing advice tools from CashCalc, Defaqto and Dynamic Planner.