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Skandia looks at move into annuity market

Skandia is considering launching a range of annuities and making other providers’ annuities available on its platform.

Head of proposition Graham Bentley (pictured) says that Skandia, which has not offered annuities in the past or made them available on the platform, is looking to develop a range of annuities, which may include a fixed-term offering. He says: “People want income and there are a lot of people who are approaching retirement who want a degree of certainty about what they are going to get, which is why people are taking fixedterm annuities.

“We are looking at both a range of annuities and offering access to annuities on the platform. We have got the capability to help people accumulate wealth, but we have not been good at providing investors with decumulation solutions.”

In February, Scottish Widows announced it will offer an enhanced annuity as part of its forthcoming mid-market annuity suite.

Worldwide Financial Planning IFA Nick McBreen says: “The annuity sector is going to become dog-eat-dog because we have got an ageing population. Providers are thinking if they are not in the annuity area, investors will not look at them for other types of business.”

Bentley says Skandia is also considering launching a range of guaranteed funds.

He says: “There are a set of people who are focused on return outcomes rather than risk buckets. We are looking at launching funds around this and potentially using guarantees.”

Hargreaves Lansdown investment manager Ben Yearsley says: “Many providers have launched these types of products that guarantee returns or protect against downside risk.

“However they are not an easy sell because investors are put off by their complexity.”

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