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Just Retirement extends fixed-term annuity break clause

Stephen Lowe 480

Just Retirement has extended the break clause in its fixed-term annuity product to include changes in economic and personal circumstances.

The provider launched its Plan Protection fixed-term product, which allows investors to exit mid-contract if their health deteriorates, in May last year.

The terms of the plan have now been extended to include additional life events such as divorce, the death of a spouse or changes in income needs.

Just Retirement external affairs and customer insight director Stephen Lowe (pictured) says: “The conversion option appeals to retirees who want the certainty of return a fixed-term annuity offers but are wary about being locked in.

“All our fixed-term annuities clients must seek professional advice and the feedback from the intermediaries was that they would like more flexibility to help clients cope with a wide range of events beyond health.

“We have responded by improving Plan Protection so that it offers the ability to convert to any other pension product allowable under UK pensions legislation, at any point, for any reason deemed suitable by the adviser and client.”


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. David Trenner - Intelligent Pensions 1st October 2012 at 10:11 am

    This puts Just on a par with LV=, but it does not explain why someone would want to buy an FTA when they could have a low risk drawdown portfolio with total flexibility.

    Given the success of MetLife’s salesforce it must be a worry to other FTA providers that even they could not make money on their FTA!

  2. David you seemed to have missed the point (which you don’t normally do). MetLife inherited the FTA and it was never main stream for them so they have probably chosen to concentrate on unit linked guarantees.
    My views on FTA are well known – there is a good customer proposition but I do worry that that some clients may not fully understand the risks. However it can be argued that the current Fixed Term policies for Aviva, LV= and Just do a good job for the so called Middle Britain group that do not necessarily want to run complicated drawdown plans.
    I am increasingly coming to the conclusion that providing advisers and their clients take heed of the three golden rules of advice in this area these policies are suitable for some clients.
    The three golden rules are:
    ? The client has other sources of income or capital to fall back on if the income falls at the end of the term
    ? They understand all the risks involved
    ? They have explored all the relevant options to ensure that the FTA is the suitable solution

    FTA is not for everyone but in this world of customer choice it is only right that options are explained and risks explained.
    Hope this helps

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