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NU and Canada Life bid to fill BRS annuity gap

Norwich Union and Canada Life are planning to plug the gap in the enhanced annuity market left by Britannic Retirement Solutions&#39 closure to new business last month.

The move comes as GE Life raises the minimum sum for annuity purchases from £5,000 to £10,000.

Canada Life is looking at an enhanced and impaired annuity launch in the second quarter of 2004 while Norwich Union&#39s impaired life annuities could be on the market later next year.

BRS&#39s withdrawal has left the enhanced annuity market dominated by GE Life and Prudential.

GE Life&#39s increase follows Legal & General&#39s rise in its minimum from £1,000 to £5,000, leaving Standard Life the only product provider taking open market business under £5,000.

Advisers warn that the lack of competition in the market – with Standard Life rarely topping the annuity tables – makes recommending additional voluntary contributions increasingly difficult to justify.

Canada Life retirement income manager Peter Carter says: “We are looking at a launch in both impaired and enhanced annuities in the second quarter next year. This will be the big market.”

Norwich Union head of retirement product development Simon Warsop says: “We already offer severely enhanced annuities and non-enhanced annuities and we are looking at the area in between.”

Bates Investment Services head of pensions James Jones-Tinsley says: “GE Life&#39s move shows the lack of competition since BRS closed to new business.”

William Burrows Annuities director Billy Burrows says: “With such a shortage of product providers taking small funds, you have to question whether it remains good advice recommending AVCs.”


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