View more on these topics

LV= weighs up stopping enhanced annuity sales

Pensions-savings-retirement-piggy bankLV= is consulting with staff on a proposal to stop selling enhanced annuities and increase its focus on secure drawdown.

The insurer says the proposed move follows a review of its annuity business and reflects changes in retirees’ buying habits since pension freedoms, as well as the interest rate and regulatory environment.

LV= will offer standard and enhanced annuities from other providers and will consider offering annuity solutions from potential partners through other propositions, for example its Retirement Account.

LV= retirement solutions managing director John Perks says: “In an ongoing low interest rate environment and with Solvency II capital requirements further depressing annuity rates, we no longer feel our enhanced annuities provide good value for customers.”

He says: “We believe it makes sense, therefore, for LV= to focus on a mixture of safe drawdown products, fixed term annuities, guaranteed funds, investments and equity release.”

LV= will be contacting advisers to inform them of any changes.

The FCA announced last month it is investigating a number of annuity providers amid concerns they failed to inform customers they may be entitled to a higher rate of income through an enhanced annuity.

Recommended

13

FCA investigates providers over enhanced annuity concerns

The FCA is investigating a number of annuity providers amid concerns they failed to inform customers they may be entitled to a higher rate of income through an enhanced annuity. The regulator conducted a review of 1200 non-advised sales at seven firms, which between them account for approximately two-thirds of the annuity market. While it found […]

Savings-Money-Currency-Business-Finance-700.jpg
3

FCA: 90,000 customers in line for enhanced annuity compensation

The FCA’s review of enhanced annuity sales could see 90,000 customers receive compensation for misselling. The regulator has confirmed that from its review of the annuity market released this morning, it can estimate that the number of customers in line for redress is approaching six figures. As part of an investigation of 1200 non-advised sales […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. “we no longer feel our enhanced annuities provide good value for customers.”
    May I translate?

    We don’t make enough money on this product and can make far more bamboozling customers with ‘secure drawdown’ which in many cases will probably pay a smaller income than an enhanced or impaired annuity.

Leave a comment