LV= has launched a one-year fixed-term annuity in response to Chancellor George Osborne’s liberalisation of the pension tax system.
The reforms, announced during last month’s Budget, will mean that anyone aged 55 or over will be able to take 100 per cent of their pension pot as cash. The new rules will be in place from April 2015.
LV= has launched a one-year version of its fixed-term annuity product targeting savers who want to bridge the gap between today and the new regime coming into force.
The provider says the product will initially be available for a period of six weeks. Clients will be able to withdraw income up to the new maximum of 150 per cent of GAD.
LV= life and pensions managing director Richard Rowney says: “As people continue to spend longer in retirement, it is vital that they have flexibility as to how they structure their income and the Chancellor’s announcement has given them just that.
“However, there will be a 12-month delay until all the latest changes are implemented and the industry goes through a period of transition.
“We believe that fixed-term annuities will play an important role in offering those approaching retirement now with a guaranteed income, without limiting their future options. Indeed, we hope that it will give many advisers and their clients the breathing space they require.”