Two weeks ago, the firm’s US parent company Hartford Financial Services Group reported a £560m net loss for Q4 2008 after a £414m profit the previous year and set out plans to slash dividends to preserve capital.
It is believed the firm is considering cutting the equity limit on its guaranteed retirement income plan from 80 per cent to 65 per cent as a way of de-risking the portfolio.
A Hartford spokeswoman says: “In light of recent economic conditions, it is important we ensure our products not only remain competitive but also deliver value to our customers and our business over the long-term. The effort to de-risk the variable annuity product portfolio is ongoing. In terms of changes to our current products, no decisions have yet been made.”
The Retirement Adviser head of retirement planning Nick Flynn says: “This is an obvious way of increasing the cost to the client while the Hartford reduces its exposure. I think that we can expect other providers to follow suit.”