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More providers increase annuity cancellation periods

Scottish Widows has increased its cooling off period for annuity purchases to 60 days following the Budget pensions shake-up.

The changes revealed by Osborne on Wednesday will allow people to take their entire pension pot as cash from age 55 from April next year.

Any Scottish Widows annuity quotations issued since 18 February will now be valid for 60 days, up from its typical 30 days. The provider says this is to allow customers more time to consider their options before applying.

Scottish Widows is contacting customers who have already applied to check they still want to go ahead in light of the new rules.

Earlier today, LV= also revealed it will double its annuity coolling off period to 60 days and is actively contacting customers.

MGM Advantage has extended its cancellation period to 60 days after the policy document is issued.

Aviva will now allow cancellations up to 30 days from when the policy is set up instead of when the application is signed.

Partnership has extended its 30-day cancellation period, with any new business accepted after 3 March given until 11 April as a cooling-off period. Any quotes currently within the guarantee period will be extended to the same date.

Standard Life says anyone who purchased an annuity up to 35 days before Budget day can cancel and they can cancel for a further 30 days post budget. It means someone who purchased an annuity on February 13 can cancel it anytime until April 18.

Under interim reforms, the Government will increase the trivial commutation limit from £18,000 to £30,000 from 27 March.

The triviality limit for private pension pots will also rise from £2,000 to £10,000, with individuals allowed to take three separate pots as cash instead of two.

In addition, the flexible drawdown minimum income requirement will be cut from £20,000 to £12,000, while the maximum income a person in income drawdown can take will increase from 120 per cent of GAD to 150 per cent.

Scottish Widows annuities director Richard Jones says:Our immediate priority is to help our current customers understand what these changes mean, and give them time before making decisions.

“Our service and support teams are working very hard to do this and the changes outlined are designed to help our customers. Annuities will remain a part of the retirement market and still be an appropriate choice for many.”

To hear from a range of industry experts about the future for annuities, join us at the Money Marketing Forum in April. Register for your free place today. (London venue FULL)

Latest annuity provider cancellation periods:

Annuity Cooling off periods2

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