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Location annuity is still in the post for Norwich Union

Norwich Union is putting plans for a postcode annuity on hold and says any decision on the product will not be made until 2004.

The life company first mooted the idea of an enhanced annuity based on where people live last June, but says concerns over the complexity of the project mean geographical factors will not be seen until 2004 at the very earliest.

NU says it is still looking at location as one of a number of factors for more individualised annuities but has expressed concerns that its brand could be harmed if existing customers found they were being penalised for moving from one area to another.

The company says it is researching a long-term project to offer a more sophisticated annuity product.

Spokesman Ian Beggs says: “We are looking at a number of factors for improving annuities but it is unlikely that location will be brought in this year. Postcode annuity was a misleading term anyway because we are only looking at location as one of a number of new factors to introduce to annuities, as well as occupation. But we do not want to make changes that are counterproductive.”

Hornbuckle Mitchell Group director Viv Belcher says: “Annuities are a very crude instrument in their current format, only distinguishing smokers and people in very poor health. Annuities based on location would help those on lower incomes as they will die sooner so it is a shame if the product may not come in.”

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