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Canada Life&#39s innovation pushes back annuity age

IFAs are hailing Canada Life&#39s annuity growth account for pushing back the compulsory purchase annuity age to 85.

The company describes the product as its most important launch. It revealed it has done a deal with the Inland Revenue to allow deferral of annuity purchase until 85 instead of the usual 75.

The annuity growth account basically combines temporary annuities with some of the principles of income drawdown.

Retirees can take out the product from age 50, using some of their pension pot to secure a temporary five-year guaranteed annuity, while the remaining pot grows in an income-drawdown-style investment fund.

After five years, the options are to buy another temporary annuity up to 85 or buy a lifetime annuity.

Annuity Bureau managing director Peter Quinton says: “This product is extremely innovative. It is a very important development as it means the Inland Revenue is more open to new ideas and this could spark a lot more blue-sky thinking from providers.”

Wentworth Rose annuities manager Steven Thurgood says: “It is a very good offering as it gives the flexibility to extend the retirement age to muchlater on, as such, it must be welcomed.

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Our client is a leading video game and publishing company best known for its console role-playing game franchises. The client provides a number of benefits, at varying levels and cost that attract a P11d liability. With the absence of a management log to track data for benefit movements, enormous administrative and therefore cost implications were occurring each year just to comply with P11d reporting requirements.

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