PensionsJun 27 2013

Scottish Widows launches enhanced annuity

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Scottish Widows is set to enter the enhanced annuities market, after estimating that almost half of its customers could qualify for an enhanced annuity.

The Scottish Widows Enhanced Annuity will be available to customers between 55 and 75 years of age, with a minimum total investment of £5,000, on a spectrum of light to serious conditions. Scottish Widows estimated 45 per cent of its customers could qualify for an enhanced annuity.

The new product will be available on single or joint life basis, a guaranteed period of 0, 5 or 10 years can be selected, as well as the option to increase income each year by a fixed rate or vary in line with the retail price index. The payment frequency of the annuity can be yearly, half yearly, quarterly or monthly in advance or arrear.

Advisers will have access to the Scottish Widows Enhanced Annuity through three market portals: Avelo, Assureweb and Tomas.

Mike Teall, head of annuity propositions at Scottish Widows, said: “The enhanced annuity market will be worth nearly £6bn this year and is expected to grow but up to 10 per cent yearly due to an ageing population and baby boomers reaching retirement.”

He added that this launch is part of Scottish Widows’ plan to increase its share of the annuity market to 10 per cent or above in the “next few years”.