CGU is to join other life offices and plans to offer a with-profits annuity.
The annuity, which is available to pension funds of between £15,000 and £1,000,000 carries guarantees the annuity will not fall below a specified amount.
This is calculated at the amount that would have been paid to a pensioner when the pension started had he chosen an anticipated growth rate of 0 per cent.
CGU marketing and strategy manager John Enos says: “The issue of falling annuity rates is causing concern throughout the pensions industry and with the Government. We are confident this new and competitive product will provide an attractive alternative for many of those people facing the important decision of how to provide for their income during retirement.”