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LV= launches one year fixed term annuity

Press release: 02/04/2014

In response to the Budget, retirement income specialist, LV= is launching a one year fixed term annuity. The product is designed for those approaching retirement who want to take advantage of the greater flexibility the new pension rules will offer, but need an income between now and April 2015.

Customers who purchase a one year fixed term annuity are able to access their tax-free cash and, if they need to, take an income over the next year. At the end of the term, clients will receive their Guaranteed Maturity Value (GMV) and, as with other fixed term annuity products, they will be able to use the capital to purchase an alternative retirement income solution.

LV=’s new retirement income solution will initially be available for a period of six weeks.

Customers who purchase LV=’s fixed term annuity will be able to select any income from nil to 150% GAD.

Those customers who should consider purchasing a one year fixed term annuity include:

  • those who can’t stay in their current pension scheme;
  • those who need to take an income now and want the security of knowing what their remaining fund value will be worth in twelve months’ time; and
  • those who may want to take their GMV as taxable cash

Richard Rowney, LV= Managing Director, Life and Pensions said: “We have developed our latest fixed term annuity product in response customer demand in the wake of the Budget announcements. This product specifically enables those retiring now to access their tax free cash and income, but defer making a decision as to how they take an income from their pension fund, in the long term, until the new rules come into effect in April 2015.

“As people continue to spend longer in retirement, it is vital that they have flexibility as to how they structure their income and the Chancellor’s announcement has given retirees just that. However, there will be a twelve month delay until all the latest changes are implemented and the industry goes through a period of transition. We believe that fixed term annuities will play an important role in offering those approaching retirement now with a guaranteed income, without limiting their future options. Indeed, we hope that it will give many the breathing space they require. The retirement income landscape is changing considerably and, as such, we would always encourage people to seek financial advice in order to make the most of their pension savings.”

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