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Catch up with the latest press releases from LV=

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LV= launches Pensions Income Plus Annuity

Press release: 07/11/2011

Retirement specialist LV= today announces the launch of its Pension Income Plus Annuity (PIPA).

PIPA, an investment linked lifetime annuity, gives clients the opportunity to have a high level of initial income, with the protection of a minimum income guarantee. Annuity rates are available on standard and enhanced terms, with around 1,400 medical conditions qualifying for enhanced rates of up to 20%.

Clients can select an assumed investment return (AIR) of between 0-4% at the outset which determines their starting income and, along with investment returns, how their income will vary each year.

Clients are protected from falls in investment returns by a minimum income guarantee. This is set at the 0% AIR income level and will never decrease.

In the event of an improvement in investment yields, the guaranteed minimum income (GMI) increases, and locks in a proportion of the investment returns received. The GMI will then rise by half of the percentage increase in income received above its previous highest level.

Clients are also protected by a unique guarantee that ensures the starting level of income will not reduce during the first two years of the policy, regardless of the AIR selected. After this period, clients can vary their AIR and have the option to convert to a non-investment linked conventional annuity at any time [1].

Investment returns applied to the annuity each year, and PIPA clients are also eligible for LV='s mutual bonus. [2]

Matt Trott, LV= Head of Annuities said: "Investment-linked annuities are increasingly popular in the UK market, with advisers and clients alike looking for more flexible and cost effective alternative solutions to standard lifetime annuities. Linking an annuity to an investment allows the fund to continue to participate in possible growth, while the GMI provides a secure lifetime income.

"The launch of our new annuity offers a simpler structure than traditional with-profits annuities and includes comprehensive features such as enhanced terms, value protection and competitive starting incomes.

"The new PIPA plan fits well into the existing range of LV= retirement solutions products. We already offer an enhanced annuity for clients looking for a fixed income. For those looking for a bit more flexibility, our fixed term annuity (the protected retirement plan) or PIPA provides another choice before drawdown becomes appropriate."

[1] Once the client has converted to a conventional annuity, they cannot convert back to an investment linked solution.

[2 ] PIPA customers also qualify for a mutual bonus which enables with-profits members to share in LV=’s financial success. This is applied to the policy as an additional payment, and is not taken into account taken when determining any increases to the GMI.

PIPA funds are invested in the LV= with-profits fund, with clients' incomes linked to its smoothed investment performance. The LV= with-profits fund has been rated 5/5 for future performance by AKG (November 2010) and 10/10 for financial strength, investment freedom and bonus-paying ability by Cazalet Consulting (September 2010).

LV= offers a 'money where our mouth is guarantee', whereby we will pay customers £1000 if tax free cash isn’t released within five working days of us receiving the required paperwork and pension funds.

All PIPA guarantees are provided by Liverpool Victoria Friendly Society Limited, the largest Friendly Society in the UK. Liverpool Victoria Friendly Society Limited has been awarded a rating of B+ (very strong) for overall financial strength by AKG (AKG Actuaries and Consultants, September 2011).

About LV=

LV= employs 5,000 people and serves over four million customers with a range of financial products. We are the UK's largest friendly society and a leading financial mutual.

When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.

We offer our services direct to consumers, as well as through IFAs and brokers, and through strategic partnerships with organisations such as ASDA, Nationwide Building Society and a range of trades unions.

LVFS is authorised and regulated by the Financial Services Authority, register number 110035. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.