If Vanessa Owen’s career had taken a different twist she could have been looking after lions and tigers at London Zoo. Instead, after taking advice from her father, she has ended up looking after the big beasts of the retirement market as head of annuities and equity release at LV=.
After university, Owen worked in recruitment for the construction industry but when that industry stagnated in the late 1980s she had to find a new career. She had the choice of a job at London Zoo or one with Woolwich Building Society.
“London Zoo seemed attractive but my father pointed out that the London Zoological Society was at that time in some financial difficulty and maybe the Woolwich was a safer bet,” says Owen.
She joined as a graduate trainee and spent three years with Woolwich, rising to branch manager of Camberwell in London. She was then persuaded by a colleague to move across to Woolwich’s IFA arm. She spent three years working as an IFA before joining its technical team to run the company’s provider panels and manage provider relationships.
By this time, however, Owen was living in Uxbridge and commuting to offices in Dartford, and the daily grind of the M25 prompted a desire to make a change.
The offer of a job at Liverpool Victoria came up when the company had just bought Frizzell Insurance and was relocating the head office to Bournemouth.
Although she says she only expected to be there for a matter of months, 16 years on she is still there and in January 2013 was made head of annuities and equity release, having spent the past five years as head of equity release.
The annuity market has seen a lot of upheaval this year, with the introduction of gender pricing, the ABI’s code of conduct for annuity sales, the RDR’s impact on annuity sales and the continued pressure on annuity rates caused by quantitative easing and greater capital adequacy requirements. But Owen says having been out of the market for the past few years has been a positive this year.
“Having spent the past few years focused on equity release, switching to annuities at the start of the year meant I had no pre-conceived ideas about how the market would operate,” she says.
She is cautiously optimistic that annuity rates will continue to increase in the New Year, but says as rates are so reliant on what happens to QE this is to some extent at the mercy of the markets.
Although conventional annuities make up the bulk of annuity sales, she expects to see people’s buying habits change as these annuities move further towards individual underwriting and poorer rates for the healthiest people as a result.
“If you are fortunate enough to be in good health at the point of retirement, you need to be taking inflation into account and you need to be looking at what the alternatives are for a standard annuity as we are not far away from every annuity being underwritten.”
In fact, she says the threat of inflation and delayed retirement are beginning to feed through to increased sales of investment-linked annuities and temporary annuities.
“In terms of the interest in alternatives, certainly we have seen an increase in fixed-term annuities. That is driven partially by low annuity rates but also by people recognising their retirement may not just mean one thing for all those years.”
Owen says this chimes with a general problem for the market – the lack of awareness and education about the costs of providing your own pension.
“People massively underestimate not only how much they need in retirement but how much they are going to get in retirement and how long they are going to live. Generally, people will undershoot their life expectancy by three to four years and some will do significantly more.”
Owen says one solution is for customers not just to rely on pensions income but to look at all their assets to determine potential income. This includes housing, although work is needed to change attitudes.
The open market option and the introduction of the ABI’s code of conduct for annuity sales have been significant developments this year. Owen says it is good to see more people shopping around but more could still be done.
While the number of people using the open market option has risen, she says the industry is hearing anecdotally that many people are choosing to stay with their existing provider due to customer loyalty.
Last week’s report from the Financial Services Consumer Panel was highly critical of non-advised annuity sales but Owen says we should not be too quick to condemn all non-advised sales.
“The concern is you could end up with less choice as a result of some of the noise,” she adds.
Owen says LV= has plans in place to make further changes to its annuity and equity release products but her biggest challenge for 2014 will be looking at how these products can be blended.
She says: “We will be looking at whether we really understand what customers need in that space and how we meet those demands.”
Born: Epping, Essex
Lives: Brockenhurst, Hampshire
Education: Haileybury, Hertfordshire, Birmingham University
Career: 2013-present: head of annuities and equity release, LV=; 2008-2013: head of equity release, LV=; 1997-2008: managing compliance and technical functions, LV=, prior to that my career took me from publican to IFA via a branch manager for the Woolwich Building Society
Likes: My Connemara pony Billie and his wonderful rider Emily, my daughter (oh and the fiancé is quite likeable too)
Dislikes: People who drive in my boot!
Drives: A Discov
Book: Ballet Shoes – thank you Emily for giving me the excuse to read it again
Film: As Good as it Gets (sucker for Jack Nicholson)
Album: Six Wives of Henry VIII by Rick Wakeman
Career ambition: To be recognised as having made a difference
Life ambition: To find that often illusive balance between ambition and contentment