Low-cost KiwiSaver provider Simplicity has launched a new fund that allows people to convert their savings into a regular income at retirement.

Currently KiwiSaver members can either choose to take some or all of their money out when they turn 65 and have been in the scheme at least five years.

Simplicity's Guaranteed Income Fund offers members the chance to leave their money in and receive a minimum 5 per cent income every year for the rest of their lives.

Savers have to put at least $50,000 into the fund which will invest in a mixture of shares and fixed interest investments but can get access to the money at any time if they need it.

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If they die the remainder of the investment money will go into their inheritance.

The income comes from investment returns and using up the capital.

Although the value of the investment can go up and down over time investors are guaranteed a minimum income through the fund buying insurance via a company called Lifetime Income Group.

Lifetime was launched by former ACC and AXA chief executive Ralph Stewart in 2015.

This insurance also kicks in if they live long enough to chew through all of their investment money.

Simplicity chief executive Sam Stubbs said too often retirees had to choose between very low term deposit rates with break fees, or overly risky investments.

"They deserve better."

Stubbs said the fund was aimed at allowing people to top up New Zealand Superannuation to meet their regular living expenses.

He said a person with a $100,000 investment would receive an income of $192.31 every fortnight for the rest of their lives.

The fund has a $30 annual member charge plus a 1.6 per cent per annum fee.