Just Retirement is not offering fixed-term annuities to new flexi-access drawdown customers due to falling demand from advisers, Money Marketing can reveal.
The provider offers fixed-term annuities through capped drawdown arrangements, meaning the product will only be available to existing capped drawdown customers.
Following the freedom and choice reforms, all new drawdown customers will be in flexi-access products. Existing capped drawdown customers will be able to continue contributing and move between providers as long as they do not break GAD limits.
Just Retirement director Stephen Lowe says: “Because of reduced demand from advisers we’ve decided to turn off the pipe, but we still believe there’s an important role for capped drawdown.
“If the market starts to reappear, we can just flick the switch back on. When the yield curve picks up you might see some of these solutions becoming more popular again.”
Fellow fixed-term provider LV= confirmed the products are available to customers in flexi-access drawdown. Metlife exited the market in 2012 blaming historically low interest rates.
Retirement Intelligence director Billy Burrows says: “On the one hand there is a case for fixed-term income plans for those clients who want a guaranteed income and to have some flexibility.
“On the other hand there is nothing that a fixed-term plans does that a good adviser could not replicate within a flexi-access drawdown using cash deposits. Therefore the case for fixed-term is strongest where a simple package is required or where the fund is not bigger enough to justify the expert advice.”