Old Mutual and Royal London have poured cold water on potential guaranteed drawdown product launches.
Both providers have held discussions about launching unit-linked guarantees which combine drawdown with assured levels of income, but have elected to hold off on any new products for the time being.
Old Mutual had been looking at the prospects for a launch, but has made the decision to set plans to one side for the time being, noting that consumers were unlikely to understand and value a product offering a blend of drawdown and annuity.
“It’s down to cost,” head of retirement policy Jon Greer says. “I know the FCA is disappointed the market hasn’t changed but frankly there are reasons for that and those are nothing new.”
Old Mutual also notes that its existing retirement products did not suffer from excess volatility, so building in protections in some cases would not be necessary.
In November last year, Royal London told Money Marketing it was assessing a number of ways in which they could underwrite a drawdown solution, including using its protection businesses, Bright Grey and Scottish Provident, to set up structured products or life insurance to sit below flexible income withdrawals.
This also appears to have been put off, however.
Royal London head of corporate affairs Gareth Evans says: “We are not going ahead with anything right now. Whether or not we completely dismiss it I’m not sure, but there isn’t anything on the stocks coming ahead.”
Few players in the market offer guaranteed drawdown products currently. Aegon, Metlife and Prudential were three of the front-runners.
Metlife, however, pulled out of the unit-linked guarantees market as it announced it was closing its wealth management arm to new business earlier this month.