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Britannic, Pru and NU are top on WP annuities

Britannic Retirement Solutions, Norwich Union and Prudential have been named as the top three with-profits annuity prov-iders in a survey by Chartwell.

The IFA has named and shamed with-profits annuity providers on the basis of the transparency of costs and charges, transparency and understanding of mortality assumptions and investment performance and financial strength.

Chartwell says many IFAs are guilty of selecting with-profits annuity providers on the same basis as conventional annuities, which are chosen purely on price.

It says with-profits annuities are much more murky, with providers often unclear about their products.

Chartwell picked out Britannic, Liverpool Victoria and Prudential as giving the most clear information on costs and charges, showing investment returns and the returns allocated to the fund.

Standard Life, however, is criticised for showing no reduction in yield on its contract, which Chartwell says is “either very generous or extremely misleading”. It says there must be costs in the contract which could be made transparent.

It found Britannic was the only provider which will not reduce bonuses to cover additional costs from errors made on mortality assumptions.

Legal & General would not provide Chartwell with information on its mortality calculations.

Pru, Standard and NU were rated for their financial str-ength and for their flexible contracts. They offer the facility to convert the with-profits annuity to a conventional annuity at any anniversary as well as altering bonus rates to give more flexibility.

Chartwell chief executive Craig Wetton says: “The ideal with-profits annuity will be a combination of all these top three. The transparency of costs and mortality assumptions offered by Britannic, coupled with the flexibility and financial strength of Norwich Union, would be how we would like to see the future of with-profit annuities.”

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