Just Retirement has reduced its minimum fund size from £5,000 to £2,000 following the FCA’s findings that people with small pension pots are poorly served by the market.
The specialist annuity provider says the move will allow more savers to access fully underwritten rates.
Just Retirement group external affairs and customer insight director Stephen Lowe says: “Right from the start we have had one of the lowest minimum fund sizes at £5,000 but we have taken the decision to reduce this to £2,000, one of the lowest on the open market, to help even more people have the option of underwritten rates.
“The pot sizes may not be big but the numbers of pensioners involved is huge – more than 50,000 annuity purchasers each year – and most simply cannot afford to make poor choices.”
Lowe adds: “We expect further reform of the system but until there is more progress our move should help many of those with small pension pots achieve better annuity outcomes.”
Last month the FCA published its findings from its thematic review of the annuities market, which found that people with a pension pot of less than £5,000 had a lack of choice, were offered a worse rate than people with larger pots, and had less access to enhanced rates.
The regulator found that 10 of the 12 providers that offer access to enhanced rates to their existing customers do not offer them to people with small pots.