Standard Life has launched a new blended income/maturity value, retirement-focused product designed to help early retirees bridge the gap between scaling back work and the State Pension.

The Standard Life Guaranteed Fixed-term Income provides a guaranteed income for people approaching or in retirement but with the flexibility to alter their plans once the fixed term period comes to an end. 

It is aimed at people between 55 (57 from April 2028) and 85 and customers can fix the income period that best suits them - anything from 3 to 25 years.

The minimum purchase price is £10,000 with no maximum but additional checks may be applied above £1m.

The blended product provides a fixed income for an agreed period followed by a maturity value at the end of the fixed period although the maturity value selected can be zero if maximum income is required.

Standard Life says the hybrid income-growth product will help meet the demand for both “certainty and flexibility in retirement.”

The provider, part of Phoenix Group, says the new hybrid product can help bridge the income gap, such as retirement before state pension payments begin, or to fix the length of time a guaranteed income will be paid without buying an annuity.

The product has been launched following the debut of the Standard Life Pension Annuity las year.

The company says the product will particularly help those who want to “transition” gradually into retirement. The plan is distributed under the Standard Life brand and is available on the open market through advised and non-advised routes, including industry quote comparison portals and specialist annuity brokers.

Key features include the ability to add additional options to help shape how people take their guaranteed income. This includes a maturity value, which allows a customer to choose an amount that will be received at the end of the fixed term, which they can either take as a lump sum or put towards another retirement income product. The lump sum can be chosen at outset or calculated based on the level of income and the term selected.

Additional options include death benefits and the option to increase income annually, either in line with the Limited Price Index, Retail Price Index, or a pre-determined fixed percentage.

Claire Altman, managing director for individual retirement at Standard Life, said: “The road to and through retirement is different for everyone but the vast majority of people want both certainty and flexibility. 

"As many as 9 in 10 people say income certainty in retirement is important to them, while the same proportion say it’s important to access all or some of their money flexibly. For these customers, the Standard Life Guaranteed Fixed-term Income does what it says on the tin – providing a guaranteed income for a fixed-term, as well as the flexibility to reassess their financial needs at a later stage.”