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&#39Only a handful of annuity firms chasing business&#39

There is only a small group of annuity providers chasing new business and they are breaking away from the crowd of traditional players which are limiting their annuity exposure, according to research by Hargreaves Lansdown.

Canada Life, GE Life, Britannic Retirement Solutions and Prudential have all changed their annuity rates on average at least every month since the middle of 2001 in a bid to remain competitive. Over the same period, Scottish Widows, Scottish Equitable and NPI only changed their rates six times and always downwards.

Hargreaves Lansdown&#39s research shows that Canada Life changed its rate 41 times, GE Life 30 times, BRS 29 times and Prudential 25 times from May/June 2001.

HL pensions research manager Tom McPhail says the data reveals which providers are committed to chasing new business and which only move their rates to avoid taking too much on to their books.

McPhail says: “If you see the likes of Scottish Widows or Standard Life at the top of the pile, you should get that rate quickly because they are there by accident rather than by design and they will not be there for long.”

GE Life head of pensions strategy David Lowe says: “Progress on publicising the open market option has been positive but it has not stopped people taking their annuity with their pension provider. Some of these providers are therefore not always looking to be among the best in the market.”

Scottish Widows pensions strategy manager Ian Naismith says: “There is a general feeling that longevity has improved better than the industry has expected.

“Many life firms are worried about their overall risk profile and do not want too much annuity business.”

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