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Introducing Australia's first guaranteed floating rate lifetime annuity

For the first time in Australia annuity investors will be able to participate fully in future interest rate movements.

We are pleased to introduce the new Challenger Liquid Lifetime RBA cash linked option. This innovative option allows retiree clients to receive higher payments as the cash rate increases, enabling them to look forward with confidence by having regular income, while also not missing out when rates start rising again.  

Liquid Lifetime RBA cash linked allows retirees to link their lifetime annuity payments to movements in the RBA cash rate (whether it be an increase or decrease). 

No other lifetime retirement income stream has delivered this combination of income certainty with the benefit of participating in future interest rate changes, until now. By investing today retirees will receive the immediate benefits of security and peace of mind that lifetime annuities bring, as well as the comfort of knowing that their regular lifetime payments will retain full exposure to future interest rate increases. This is a smart new defensive solution for providing income certainty given current global market volatility.

Below is an illustration of what the annual payment for a 65-year old male who invested $100,000 (rates effective 01 August 2020) could be under different Reserve Bank cash rates. Note there is no limit to payment amounts – for example if the RBA cash rate was 8% then that would be used to calculate payments.

RBA cash linked payments graph

An investment in a Challenger Guaranteed Annuity (Liquid Lifetime) can provide a range of benefits that enable retirees to look forward with confidence, including:

  • guaranteed income for life – irrespective of how long your client lives or how investment markets perform;
  •  access to capital over a long period;
  • guaranteed death benefits;
  • flexibility to withdraw and be paid a lump sum if your clients’ circumstances change within the withdrawal period; and,
  • an immediate increase in Age Pension for certain assets tested retirees.

And now the ability to link clients’ annuity payments to the RBA cash rate and participate in future interest rate changes.

Find the Challenger product and payment option that best suits your clients:

Products  
Liquid Lifetime Flexible Income (Immediate Payments) Liquid Lifetime Flexible Income (Deferred Payments)
Liquid Lifetime is a secure investment that pays a regular income for life in return for a lump sum investment. The Flexible Income (Immediate payments) option starts paying your client a lifelong income immediately.
 
The Flexible Income (Deferred payments) option starts paying your client a lifelong income after a deferral period of their choice. Monthly payments are higher in the Flexible Income (Deferred payments) option than the Flexible Income (Immediate payments) option
Guaranteed income payments for life?

Yes
Guaranteed income payments for life?

Yes
Attractive Social Security means test or assets test assessment outcomes?

Yes – only 60% of any amount invested is assessable under the Social Security assets test and 60% of income paid assessable under the income test 
Attractive Social Security means test or assets test assessment outcomes?

Yes - only 60% of any amount invested is assessable under the Social Security assets test and 60% of income paid (after the deferral period) assessable under the income test 
Ability to nominate a beneficiary?

Yes
Ability to nominate a beneficiary?

Yes
How can this product be funded?

Using non-super or super savings
How can this product be funded?

Using super money only
Payment options:

CPI indexed (default)
Partially CPI indexed
No CPI indexation
RBA cash linked
Payment options:

CPI indexed (default)
Partially CPI indexed
No CPI indexation
RBA cash linked

May be suited to: 

Clients who want to secure an income stream and start receiving payments today.

May be suited to:

Clients who want to secure an income stream today for their later years of retirement.

Payment options     
Full CPI indexation (default) and partial CPI indexation No CPI indexation  RBA cash linked
The full regular payment, or part of the regular payments will be indexed annually in-line with changes in CPI. Fixed payments that never change. Regular payments will change whenever there is a change in the RBA cash rate (whether it be an increase or decrease).

Available with all Liquid Lifetime products?

Yes

Available with all Liquid Lifetime products?

Yes

Available with all Liquid Lifetime products?

No – this payment option is not available with the Liquid Lifetime Regular Income option.

 May be suited to:

Clients who want guaranteed income payable and want the value of their investment to match inflation.

 May be suited to:

Clients who want a known, fixed payment that is not linked to inflation or cash rate movements.

 May be suited to:

Clients who want guaranteed income payable for life but are concerned about missing out on future interest rate increases.