LV= considers blended annuity launch

Insurer LV= is considering launching a new type of annuity that combines lifetime certainty with a limited amount of investment risk.

Steve Lewis, head of distribution for retirement solutions, said at a retirement income round table today that it is considering alternative annuity types for the coming year.

“One of the things we are looking closely at is doing an 80:20 plan,” he said, explaining that such a set-up would see 80 per cent allocated to a lifetime annuity and 20 per cent in an investment-linked arrangement.

It would allow annuitants to have some level of certainty while still taking on some investment risk for potential growth, Mr Lewis added.

“A little bit of risk is not a bad thing,” he said. “We have got both products, what could we do? It is the middle market of what you might call portfolio solutions.”

Mr Lewis said LV= is not a fan of ‘third way’ annuity products but that a ‘mix and match’ approach is being taken by many advisers, with products blended together to create an overall solution.