Retirement specialist LV= is consulting with its employees on proposals to stop selling enhanced annuities and increase its focus on its secure drawdown options as well as its wider Retirement Solutions business.
The proposed move follows a review of its annuity business and reflects changes in retirees’ buying habits since the Freedom and Choice reforms as well as the current interest rate and regulatory environment. Instead of having to purchase an annuity for life consumers now have access to a much wider range of retirement products and LV= has seen an increase in demand for secure drawdown solutions such as its fixed term annuities as well as guaranteed funds and wider income drawdown products.
John Perks, Managing Director of Retirement Solutions at LV=, said:
“The pensions market has changed considerably over the last 18 months. Instead of viewing retirement as a one-time event, people are increasingly looking at shorter time horizons and seeking more flexibility in their retirement income.
“In an ongoing low interest rate environment and with Solvency II capital requirements further depressing annuity rates, we no longer feel our enhanced annuities provide good value for customers. We believe it makes sense, therefore, for LV= to focus on a mixture of safe drawdown products, fixed term annuities, guaranteed funds, investments and equity release.”
LV= will continue to offer standard and enhanced annuities from other providers where they are the right option for consumers via its various advice solutions. It will also look to offer competitive annuity solutions from potential partners that are interested in being part of LV=’s market-leading blended propositions, including its award winning Retirement Account.
LV= will be contacting advisers to inform them of any changes. In the meantime, any advisers who wish to know more should visit www.lv.com/adviser
or call 08000 850 250