The Retirement Account, with the new Fixed Term Cash Deposit.

The last 12 months have seen the most volatile stock market conditions in decades. But as we all know, those who weather adversity best are the ones who can be flexible. So what is it that smart retirement investors are looking for in their attempts to adapt to this changing environment?

For a start, it’s no surprise that so many people are turning to cash. Its combination of less risk and greater liquidity can give investors more flexibility in the short term. And with returns on deposit products having generally fallen in line with the Bank of England base rate, cash investors are keen to move to products which offer the best interest rates. Competitive returns are often available from fixed-rate products, which can also allow investors who want to protect themselves against further movements in the base rate.

Flexibility is another major factor, and also adds a degree of convenience for the IFA. For example, some fixed-term cash deposit products don’t allow for partial withdrawals during the term. Products that do offer this level of flexibility could therefore be more attractive to clients.

Of course, when considering cash investments, the amount the client has to invest in the first place can be a make or break factor, so minimum investment amounts are something to be wary of – the absence of any such restriction can give the client greater freedom and choice.

The importance of keeping up with a rapidly- changing economy and the needs of the investor have never been in question. But with market conditions changing so dramatically and so quickly, it’s down to product providers to reconsider the needs of the investor, and consequently the IFA. That’s why we’ve considered all these factors and added a range of improvements to our Retirement Account.

With a combination of new features including the Fixed Term Cash Deposit, we’re hoping our Retirement Account can help restore confidence in the industry and also help advisers to build their businesses.

One year is a short period of time in pension terms, and finding a place for their investment to see out the tough times is a priority for many clients. So the Fixed Term Cash Deposit is available in tranches, maturing 12 months after the start date. The rate of interest payable on amounts held to the end of the term will be set before each tranche, so advisers can compare the rate before their clients invest. No interest will be paid on amounts withdrawn before the investment end date.

If you’d like to learn more about how the refreshed Retirement Account can help you build your business, please speak to your Scottish Widows account manager or visit www.scottishwidows.co.uk/deposit to download sales aids.

Richard Jones
Head of Retirement Income & Planning, Scottish Widows