Aegon has said that its Secure Lifetime Income, available from June 29, 2009 offers customers a guaranteed minimum income of between 3.5% and 5% of their original investment from age 60, with the added benefit of allowing them to easily access their remaining capital at any time, should they require this. At the initial levels, the income will be tax-free for life.

The income level is dependent on the age of the customer when they start taking income. Those taking income from age 60 will receive a guaranteed minimum lifetime income of 3.5% of original investment. Customers taking income from age 65 will receive 4%. Those taking income from age 70 will receive 4.5% and customers who start taking income at 75 will receive a guaranteed minimum income of 5% of their original investment for the remainder of their life. These guarantees are absolute minimums and have the potential to grow in line with underlying investment performance.

Aegon's Secure Lifetime Income bridges the gap between the guaranteed income of a purchased life annuity and the flexibility of an investment bond, added Aegon.

In addition to the lifetime income guarantees, Aegon's Secure Lifetime Income also provides the potential for growth in both income and capital. At each policy anniversary, any investment growth is measured. If the cash-in value is greater than that measured at a previous policy anniversary, this will increase the guaranteed income for the customer, in line with the growth achieved. There is no cap on the growth potential. If, on the other hand, the cash-in value has fallen from a previous anniversary, the guaranteed income will not reduce. Aegon's Secure Lifetime Income also offers an inheritance benefit of 100.1% of the cash-in value or the original premium less any withdrawals - whichever is the greater.

Gordon Greig, head of individual marketing at Aegon, said: "A guaranteed income is more important than ever for people as they approach retirement, given current low interest rates and stockmarket volatility. But the next generation of retirees is looking for more. Aegon's Secure Lifetime Income also offers control over where money is invested, the potential to benefit from stockmarket growth, and access to capital.

"This is a powerful combination and our new approach represents an important development in the UK variable annuity market. Our research shows that increasing numbers of advisers and their customers are recognizing the benefits of the new third way products. Aegon has led the way in this market since 2006, and we believe our new product will be an attractive choice for customers approaching retirement in the current environment."

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